KBRA releases research that examines the capital relief that financial institutions can obtain using synthetic risk transfer (SRT) transactions, as well as typical structural features, market volumes, and recent developments regarding Basel 3 capital requirements. SRT transactions, a form of securitization, have gained prominence in optimizing capital requirements for financial institutions by reducing risk weightings assigned to portfolios of loans held on their balance sheet.

The SRT market has been expanding since 2014, with over 100 deals executed globally in 2022. Growth has occurred across various assets classes and geographies, including the U.S., since 2019. Further growth is anticipated in the years ahead given the implementation demands of Basel 3 Endgame for increased bank capital.

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Related Publications

• Synthetic Risk Transfers Taking the Spotlight
• European Significant Risk Transfer Symposium 2024 Recap
• Capital Relief Trades Seminar 2023 Conference Recap

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

Doc ID: 1006102

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