We have completed our preliminary review of the final “safe harbor” rule released yesterday by the FDIC. The FDIC has agreed to conform its rules to the inter-agency Dodd-Frank risk-retention ones. But, until the shape of the Dodd-Frank rules is set, the FDIC reigns. This will, we think, lead to wholesale confusion in ABS markets in general and a freeze on any PLS in the mortgage sector until Dodd-Frank standards emerge.
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