06 Jun 2017
An overview of State aid control in the UK in 2015
Significant risk transfer (SRT) transactions enable credit institutions to achieve a reduction in the amount of regulatory capital they are required to hold by transferring the credit risk in respect of certain assets to other parties as part of either a traditional cash securitisation or a synthetic securitisation. Credit institutions hoping to engage in SRT transactions need to consider the relevant regulatory framework governing SRT transactions, which seeks to prevent regulatory arbitrage where there is a technical asset transfer but not a substantive transfer of risk commensurate with the regulatory capital saving proposed to be achieved by the securitisation.
This material is provided for general information only. It does not constitute legal or other professional advice.
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