Synthetics sweetener teases European banks

As structural woes resolve, regulators remain split on preferential capital treatment for STS deals

Europe’s economies are in need of something sweet to help perk up their post-pandemic listlessness. And as the European Commission seeks ways to revive them, banks have been quick to point to a possible solution. Balance sheet synthetic securitisation – an increasingly popular technique that transfers credit risk off bank’s balance sheets – could help, say bankers.

For them, there is some good news. Europe’s banking watchdog, the European Banking Authority, recently completed its feasibility