Proposed bank capital rules are likely to both benefit and crimp the securitization market, potentially making highly rated transactions less attractive while having uneven effects on different asset classes.

The Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. issued a three-part proposal for comment in early June that, as written, could reshape the securitization market. In particular, big banks are likely to be less incented to hold highly rated ABS on their books, since the proposed rules would set a risk weight floor of 20%.

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