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Basel Committee Finalizes Revisions to Securitization Framework

December 11, 2014

On December 11, 2014, the Basel Committee on Banking Supervision (BCBS) published final revisions to the securitization framework for determining regulatory capital requirements on exposures arising from securitization transactions. The recent financial crisis highlighted weaknesses in the Basel II securitization framework, including mechanistic reliance on external ratings, lack of risk sensitivity, cliff effects, and insufficient capital for certain exposures. BCBS seeks to address these issues through the final revisions to the securitization framework.

The most significant revisions to the existing Basel II securitization framework include:

The new securitization framework will come into effect in January 2018.

For a copy of the final revised securitization framework, click here.

For a copy of the related BCBS press release, click here.