Crisis Era’s Sub-Prime Securitizations Have Almost Vanished: FSB

Most of the complex financial structures contributing to the global financial crisis, such as securitization of sub-prime assets, CDOs and re-securitizations, have almost disappeared, the Financial Stability Board said in a report on Wednesday.

• They diminished after the International Organization of Securities Commissions (IOSCO) and Basel Committee on Banking Supervision (BCBS) enforced a number of regulatory restrictions, particularly around minimum risk retention and prudential requirements
• Risk has been partially redistributed from banks to non-bank financial intermediaries, with banks shifting toward higher-rated tranches
• Not all jurisdictions are enforcing reforms to the same degree, particularly in the CLO market, according to the ...