Reported 8 months ago
Regional banks in the U.S., like Truist and Huntington Bancshares, are engaging in agreements with hedge funds to offload the risk of loans in order to meet new regulatory standards and protect themselves from potential crises. These deals, known as synthetic risk transfers, are attracting private-debt fund managers such as Ares Management and Blackstone, offering them lucrative investments. With regulators pushing for stricter rules after bank failures, such risk transfers are seen as a way for banks to stabilize, save capital, and eventually resume investments in activities like share buybacks and acquisitions.
Source: YAHOO