Risk retention ‘substantially diluted’ for STS proposal
Parliament compromises to pass STS securitisation proposal, but industry is still pessimistic
The European Parliament has passed proposals to establish a framework for simple, transparent and standardised (STS) securitisations, after a compromise was struck that reduces the risk retention requirement from previous parliamentary proposals but still represents an increase on the current standard.
"There have been a lot of changes, and the retention provision, which has been the most problematic, has been substantially diluted to something more bearable," says a securitisation industry
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