The Basel Committee has released a new approach to “step-in risk” that could have significant impact on foreign banks active in mortgage securitization, limiting the ability of these banks to play in U.S. PLS much as U.S. banks are constrained by the direct Basel rules applicable to banking organizations. If Fannie and Freddie ever came under robust regulatory-capital standards, these would also have significant impact on them if, by then, the GSEs remain in the risk-share game.
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