SFIG and SIFMA Submit Comment Letter to U.S. Regulators on LRC’s Impact on Securitization

WASHINGTON, D.C. – February 1, 2014 – The Structured Finance Industry Group, Inc. (“SFIG”) and Securities Industry & Financial Markets Association (“SIFMA”) today filed a joint comment letter with the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve and the Federal Deposit Insurance Corporation (collectively, the “Agencies”) regarding proposed rules on the liquidity coverage ratio (LCR) and its impact on traditional securitization activities. SFIG and SIFMA also filed a separate letter to the Agencies today in partnership with The Clearing House Association L.L.C., the American Bankers Association, the Financial Services Roundtable, the Institute of International Bankers and International Association of Credit Portfolio Managers regarding all aspects of the proposed LCR rules.

SFIG and SIFMA believe that the proposed rules should be modified to recognize that securitization is an essential source of funding to the U.S. economy and vital to a bank’s liquidity management strategy. The letter argues that the rules currently under consideration do not adequately recognize specific securitizations that play an important role in bank financing activities and help banks meet liquidity requirements during times of heavy outflow activities.

“Securitization plays a central role in enabling financial institutions to provide critical financing to businesses of all sizes and the LCR rules, as written, could create serious constraints on lending, potentially jeopardizing the ability of businesses to obtain vital funding,” said Richard Johns, Executive Director of SFIG. “We feel the constructive comments we have provided today will allow the Agencies to better account for the important role of the securitization industry without undermining the primary goal of improving overall liquidity standards.”

“The proposed rule falls short in recognizing the liquidity of securitized products,” said Chris Killian, Managing Director and Head of Securitization at SIFMA. “We believe that securitization plays an integral role in moving capital from our financial institutions into our communities. Many securitized products are traded in deep, liquid markets and by failing to recognize this liquidity, we risk shrinking the investor base for these products and hindering their ability to fund the credit creation needed to drive our economy.”

About Structured Finance Industry Group, Inc.
Structured Finance Industry Group, Inc. (“SFIG”) is a member-based, trade industry group focused on improving and strengthening the broader structured finance and securitization market. SFIG provides an inclusive network for securitization professionals to collaborate and, as industry leaders, drive necessary changes, be an advocate for the securitization community, share best practices and innovative ideas, and educate industry members through conferences and other programs. Members of SFIG represent all sectors of the securitization market including issuers, investors, financial intermediaries, law firms, accounting firms, technology firms, rating agencies, servicers, and trustees. Further information can be found at www.sfindustry.org

The Securities Industry and Financial Markets Association (SIFMA) brings together the shared interests of hundreds of securities firms, banks and asset managers. SIFMA's mission is to support a strong financial industry, investor opportunity, capital formation, job creation and economic growth, while building trust and confidence in the financial markets. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.

SFIG Media Contacts:
Pat Tucker / Madelyn Dillabough
Abernathy MacGregor
pct@abmac.com / mhd@abmac.com

SIFMA Media Contacts:
Carol Danko
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