EBA: No Synthetic Swerve On 122a Rules

04 Oct 2011

European banks investing in securitizations will not be able to dodge investor due diligence requirements under the Capital Requirements Directive’s Article 122a by using synthetic hedging—such as credit default swaps—to shift exposures onto an unaffiliated non-regulated entity, the European Banking Authority has said.

European banks investing in securitizations will not be able to dodge investor due diligence requirements under the Capital Requirements Directive’s Article 122a by using synthetic hedging—such as credit default swaps—to shift exposures onto an unaffiliated non-regulated entity, the European Banking Authority has said.

The clarification is one of several ...

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