The Basel Committee has proposed a revised approach to step-in risk – i.e., implicit recourse – related to securitizations and other unconsolidated instruments, exposures, and even relationships.  We viewed the initial Basel approach in late 2015 as a significant problem for securitization risk-sharing and PLS.  The new approach is far less binding and thus considerably less costly, although it still could have teeth if regulators choose to implement them.

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