Reuters: Regulatory News: Banks regulator could soften rules on securitised products-FT

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Banks regulator could soften rules on securitised products-FT Sep 29th 2013, 18:08 Sept 29 | Sun Sep 29, 2013 2:08pm EDT Sept 29 (Reuters) - The world's banks watchdog could relax stringent capital rules on securitisation or asset-backed products as part of a second look at the instruments blamed for triggering the global financial crisis, the Financial Times reported on Sunday. Stefan Ingves, head of the Basel Committee on Banking Supervision told the FT in an interview that the supervisory body could soften tough capital rules on the instruments, which include pooled assets such as mortgages or commercial loans that are resold to investors in tranches. () "Securitisations need not in any sense be bad," Ingves told the FT. "Risk weights are not for ever. We need to review them. We need to look at the appropriateness of various structures and pass judgment on them. This should happen next year," he was quoted as saying. Once a key source of funding for banks, the securitisation market has shrunk to a fraction of its previous size. In the wake of the financial crisis, Basel introduced a quick fix, known as Basel 2.5, that already tripled how much capital banks must hold cover holdings of securitised debt. The securitisation market is in the doldrums following the crisis but policymakers see it as a key tool to help banks fund themselves in future and wean themselves off central bank liquidity. Link this Share this Digg this Email Reprints

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