Full Description
Banks have long used credit protection tools like security, collateral arrangements, guarantees, and-more recently-securitization to manage credit risk. However, since the 2008-2009 financial crisis, as banks have been required to maintain more capital against their exposures, there has been ever-increasing pressure on banks to mitigate their credit exposures to specific clients so as to manage their capital more efficiently. Today, finance lawyers are increasingly required to ensure these arrangements meet stringent regulatory standards so as to effectively manage capital requirements.
Credit Risk Mitigation and Synthetic Securitization comprehensively addresses the evolving rules and regulations governing the structuring and recognition of credit protection and securitization, with close reference to the global regulatory framework established by the Basel Accords, as well as specific UK and EU laws and regulatory policies. The book provides a detailed analysis of how, why, and when the relevant legal techniques function from a prudential regulatory perspective, including the Basel Framework, EU Capital Requirements Regulation (CRR), and UK Prudential Regulation Authority (PRA) rules.
Focusing on both traditional and modern legal tools including credit risk insurance and synthetic securitization, the book not only outlines the additional legal and regulatory requirements but also explains how these requirements can be satisfied in practice. It highlights common pitfalls faced by transactional and advisory lawyers and offers practical solutions and remedies.
Authored by experienced practitioners who advise banks on the use and treatment of these products, Credit Risk Mitigation and Synthetic Securitization is an invaluable resource for practitioners seeking to navigate the complex legal and regulatory frameworks in the financial sector.
Contents
1: Introduction
2: Funded and Unfunded Credit Protection
3: Guarantees
4: Functional Equivalents to Guarantees and Credit Derivatives
5: Funded Credit Protection and the Banking Book
6: Real Estate Finance and Specialized Lending
7: Derivatives, SFTs, and the Trading Book
8: Groups and Intermediated Credit Protection
9: Securitization and Significant Risk Transfer
10: Significant Risk Transfer: Legal Requirements and Structural Considerations
11: Regulatory Capital Implications of Achieving Significant Risk Transfer
12: Securitization: Other Regulatory Considerations
13: Effectiveness, Enforceability and Legal Opinions
