On Monday, the global uber-regulators in the Financial Stability Board announced that they will work on new international securitization rules. These will, we expect, track recommendations released late last week by the Joint Forum, an advisory group to the FSB consisting of the Basel Committee for banking rules and the International Association of Insurance Supervisors and International Organization of Securities Commissions. Most interesting to us in the Joint Forum paper is the clear pass it takes on risk retention. U.S. regulators supported it in general terms, but the EU has had second thoughts as risk retention there quashed the private-label market and covered bonds remain moribund. While the FSB report strengthens the hand of risk retention opponents here the U.S., regulators likely believe their hands are tied by Dodd-Frank regardless of what happens elsewhere.


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