The deal is known on Wall Street as a synthetic risk transfer
Regional banks around the U.S. hoping to insulate themselves from a replay of the turmoil that followed Silicon Valley Bank’s failure last year.
Wall Street smells a payday.
Ohio-based Huntington Bancshares recently entered into an arrangement to sell investors some of the risk that its borrowers won’t repay their loans. That helps the bank meet new proposed standards meant to make lenders look healthy to regulators.
The deal is known on Wall Street as a synthetic risk transfer
Wall Street Journal 19 June 2024
One big reason the global financial system nearly collapsed in 2008 was banks relying on insurance-like instruments.
They’re at it again.
https://englundmacro.blogspot.com/2024/03/one-big-reason-global-financial-system.html
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