Letter to the European Banking Authority on Unfunded Credit Protection under the Capital Requirements Regulation
The FMLC wrote to the European Banking Authority asking for guidance on some features of the European regulation which sets out a credit risk mitigation ("CRM") framework whereby the capital adequacy requirement which a credit exposure attracts can be reduced by effective protection in the form of a third party agreement to cover losses. In particular, the FMLC requests clarification on whether the form of a financial agreement is a key element in determining whether such agreement will qualify as CRM and the circumstances under which credit insurance can be used as a CRM technique.
|Letter to the European Banking Authority on Unfunded Credit Protection under the Capital Requirements Regulation|
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