Banking organizations looking to reduce the amount of risk-based regulatory capital required to support residential mortgage loan portfolios can use synthetic securitization to convert the capital treatment of their exposures from wholesale or retail exposures to securitization exposures. In this Legal Update, we discuss how regulatory capital requirements impact banking organizations that hold portfolios of
Navigating the European Rules and Regulations.
Synthetic securitization has had a rocky ride in Europe. 2004-2005 was the high watermark. The financial crisis almost killed off the market, before a gradual recovery began. In 2018, there were 49 European synthetic securitization deals, reaching a post-crisis record of EUR 105 billion.Continue Reading Capital Relief Trades: Structuring Considerations for Synthetic Securitizations (Part three of a three part series providing a U.S. and U.K perspective)
We continue our series on capital relief trades (CRTs) with a look at issues that arise under the Volcker Rule and U.S. risk retention rules in connection with structuring CRTs in the U.S.
Please be on the look-out for Part three of our CRT series in which Ed Parker, global practice head of Derivatives & Structured Products at Mayer Brown will provide a UK perspective on CRTs, including the capital treatment and regulatory requirements for such transactions and the insurance and swap issues arising in connection with CRTs issued in the United Kingdom, as well as the European Banking Authority’s consultation paper on an STS framework for synthetic securitizations.
You can find Part two of our CRT series here.Continue Reading Capital Relief Trades: Structuring Considerations for Synthetic Securitizations (Part two of a three part series providing a U.S. and U.K perspective)
Today, we are kicking off a three part series discussing capital relief trades (CRTs)—often referred to as synthetic securitizations—which are used by banks to transfer risk on reference pools of assets to non-bank investors, reduce the risk weight of assets held by such banks and improve capital ratios.
Historically, the CRT market has been dominated…