Basel Committee proposes amendment to capital rules for non-performing loan securitisations

Basel Committee proposes amendment to capital rules for non-performing loan securitisations

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Basel Committee proposes amendment to capital rules for non-performing loan securitisations

By Bank for International Settlements (BIS)

This 2020 technical amendment marks a strategic effort by the Basel Committee on Banking Supervision (BCBS) to close a critical gap in the regulatory treatment of Non-performing Loan (NPL) Securitisations. Unlike traditional securitisations, where the primary risk is the probability of default, NPL transactions deal with assets that are already defaulted.

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