The Federal Reserve has made big losers out of ABS and RMBS structures because it doesn’t consider them liquid high quality assets under liquidity coverage ratio rules implemented on Sept. 3, 2014, according to participants of the ABS East conference hosted by Information Management Network (IMN). 

The final US LCR rules under Basel III [Europe must also implement LCR rules under Basel] gives RMBS and ABS 0% liquidity at a time when the EU is making a push to emphasize the importance of securitization to revitalize the economy and asking that RMBS and ABS, given their strong performance throughout the crisis, be given the designation of high quality assets.

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