Continuing our analysis of Treasury’s capital-markets report, we here assess its impact on asset-backed securities (ABS). Noting that the crisis gave ABS in general a high-risk reputation, Treasury argues that sound securitization has numerous benefits that revisions to post-crisis rules would deliver to markets still struggling to restore credit capacity. Because its banking report focused on mortgage securitization (see Client Report REFORM136), this one addresses the secondary market for other asset classes, with Treasury recommending sweeping changes to current bank regulatory-capital and -liquidity standards as well as to risk-retention rules and SEC disclosures.
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