The latest plans of international regulators for capital adequacy requirements threaten to cripple the securitization industry, bankers reckon. Proposals from the Basle Committee on Banking Supervision would force banks investing in asset-backed securities to hold a much larger amount of capital in reserve than for corporate bonds of the same credit rating.
“The securitization group seems to have set off on its own path, which does not align with the Basle II process at all,” says a UK banker.
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