EBA Consultation Paper on Significant Risk Transfer and Related German Compliance Changes

Summary: On December 17, 2013, the European Banking Authority issued a consultation paper regarding the manner in which national regulators and originator credit institutions should determine whether there has been significant risk transfer in connection with an institution’s securitization practices. The consultation period runs until March 17, 2014. A successful transfer permits the exclusion of the transferred exposures from the calculation of risk-weighted exposure amounts and expected loss amounts.