Mark McGuire

Risk retention in securitisations: if not the original lender, who else?

It is almost 15 years since the EU’s risk retention (skin-in-the-game) rules were developed in response to concerns that interests of investors in securitisations and their originators were insufficiently aligned. In that time, the market has developed a number of solutions to adhere to the rules in situations where there may no longer be a substantial entity that was involved in the creation of the underlying exposures to perform the risk retention function.