The US Treasury is planning to overhaul securitisation markets with tough new rules designed to reduce the incentive for lenders to originate bad loans and flip them on to investors. The rules will force lenders to retain part of the credit risk of the loans that are bundled into securities, and to end the gain-on-sale accounting rules that helped spur the heart of the financial crisis. The plan is part of a wider regulatory overhaul to be unveiled on Wednesday.

This entry was posted by Gwen Robinson on Tuesday, June 16th, 2009 at 5:27 and is filed under Capital markets. Edit this entry.