Reported 7 days ago
Market participants are increasingly worried about the credit risk associated with significant risk transfers (SRTs), which banks use to alleviate capital pressures by offloading credit risks to investors. Global regulatory bodies are closely watching this trend due to potential implications for financial stability, although current observed losses remain modest. The surge in new investors entering the SRT market is also driving down risk premiums, which some analysts warn may lead to a more challenging pricing environment for transactions in the future.
Source: YAHOO