European banks are having a hard time getting loans off their books by bundling them into collateral for bonds, which would free up capital for more lending. So instead, many are opting to sell securities exposed to the risk in these assets.

The latest recognition of what is known as “synthetic” securitization comes from the Prime Collateralised Securities Initiative, an independent non-profit that seeks to boost asset-backed issuance by labeling securities that meet its criteria as “high quality.” On Thursday, the PCS announced a new label to be awarded to synthetic transactions.

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