FSA hits back on risk transfer proposals

25 Aug 2011

Minutes from the FSA’s securitisation standing group, published on Wednesday, show the regulator standing firm on its risk transfer guidelines. The new guidelines were put out for consultation at the end of June, but have proved controversial.

The FSA is proposing that firms must get external ratings on part of any securitisation before they will be able to demonstrate Significant Risk Transfer. This means banks cannot get regulatory capital relief by selling off the risk in a loan book without involving a rating agency.

Ashley Kibblewhite, ...

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