December 11, 2014 Alert - Final Revisions to the Securitization Framework Released by BCBS
The Basel Committee on Banking Supervision (“BCBS”) announced the release of its revisions to the securitization framework intended to strengthen capital standards for bank-held securitization exposures. The release follows the BCBS’ public consultation on the proposals earlier this year to address weaknesses in the Basel II framework, including an over-reliance on external credit ratings, lack of risk sensitivity, cliff effects and insufficient capital for certain exposures. The revisions include a streamlined hierarchy of approaches that can be used for calculating risk-based capital requirements, as well as changes to the risk drivers used under each approach and the framework’s calibration for the amount of capital banks must hold.

SFIG worked with the Global Financial Markets Association, Commercial Real Estate Finance Council, Commercial Real Estate Finance Council Europe, Institute of International Finance, International Association of Credit Portfolio Managers, International Swaps and Derivatives Association and Securitisation Forum of Japan to submit comments in March 2014 in response to the BCBS' earlier consultation. For questions regarding SFIG’s related advocacy, please contact Sairah Burki.
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