Addressing another vexing inconsistency in its capital framework, global regulators are proposing not only to speed up the time when banks must recognize past-due and defaulted loans – triggering MI and RMBS claims — but also effectively bar restructurings that stave off the day of doom. For all the discipline this will institute for wayward banks, it will also force more immediate recognition of default that will then demand faster payment by private MIs and calls on the GSEs and Ginnie for P&I guarantees.
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