Bank of England slams master trusts

20 Dec 2010

The Bank of England has slammed RMBS master trusts, branding them opaque and less attractive to unleveraged investors, in its Financial Stability Report that was published on Friday.

Adding that the structure generated perverse incentives, the Bank argued that banks should make the effort to provide long dated fixed rate assets to “match the requirements of natural long term unleveraged investors — insurance and pension funds.”

It wanted a broader market for secured funding and was aware ...

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