Deteriorating credit quality among some of Europe's biggest financial names has investors questioning just how exposed securitizations might be to third-party risks. Much of the disquiet - which was prompted by the spate of downgrades of European banks and non-banking financial institutions - are without merit, as the language incorporated within the transaction documents generally address such scenarios, market analysts said.

"It's hard to predict who will be affected and when, but when big names like Dresdner Bank and JPMorgan begin to be affected, it will start to impact confidence," said Olivier Delfour at Fitch Ratings. According to Fitch, many of the banks and non-bank financial institutions that have had ratings volatility participate in a number of credit-sensitive roles in the structured finance market, such as liquidity provider, letter-of-credit provider, trustee, servicer, back-up servicer, derivative counterparty and investment account provider.

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