Risky mortgage lending may have triggered the financial crisis, but final risk retention rules go much easier on mortgages than securitizations of other kinds of assets.
The Federal Deposit Insurance Corp. approved a final rule at its morning meeting that will require lenders to retain at least a 5% stake in loans they securitize unless they meet the definition of "qualified residential mortgages."
Regulators are finally ready to unveil a final risk retention rule, but whether the new regulation provides enough certainty to jump start the mortgage securitization market is an open question.
The leveraged loan market may have hit the pause button, but at least three U.S. managers were marketing collateralized loan obligations this week, according to rating agency presale reports.
Regulators will unveil a long-awaited final rule next week that requires lenders to retain some of the risk for loans they securitize, a critical part of the Dodd-Frank Act that the agencies have struggled to implement.
The limited number of buyers able to write big tickets allows them players to dictate terms.
Risk-retention rules could thin the ranks of CLO managers; the industry was hoping for a workaround, but what it got is pretty much unworkable.
The U.S. market for collateralized loan obligations would shrink by 75% if proposed risk-retention rules are implemented, according to the Loan Syndication and Trading Association.
DFG Taps Goldman Vet, Barclays Bulks Up on CMBS, Ares Adds Jeffrey Kramer and the ASF Retains Mike Williams as Policy Adviser
A shift in the leveraged loan market has intensified grumbling among CLO managers about the way Standard & Poors rates the senior tranches of these deals.
Vice President of Regulatory Compliance
Firm: Clayton Holdings
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