What follows is the first installment of a two-part series on the potential impact of the new Basel framework on the structured finance market

The Basel Committee's development of a new capital framework has one major aim: to better align regulatory capital with economic risk (and in so addressing the shortcomings of the 1998 Accord). For securitization, it does have an important corollary. As notes Alexander Batchvarov, research head at Merrill Lynch, in the firm's International Structured Credit Weekly: "The better Basel II achieves such objective of realigning regulatory capital with bank exposures' risks, the smaller the incentive for banks to securitize such exposure in order to reduce regulatory capital."

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.