The recent conclusion of negotiations on the European legislative framework for STS securitization ends a long period of uncertainty and unrest for the market. Now that the framework has been largely finalised (save for official publication of the final legislative texts), this series of Client Alerts will examine the key aspects of the framework in further detail during the 18 months until its implementation in 2019.
Part 1: An Overview
This Part 1 of the series provides a status update and an overview of some high-level issues as well as a comparative analysis of the various risk-weights, floors and caps under the STS framework with the global equivalent under Basel III and the existing European regime. We also round-up some of the key regulatory discussions amongst market participants attending the recent Global ABS Conference 2017 in Barcelona, where the progress made towards the framework's completion was welcomed.