Cloud 9fin SRT across continents
Jun 26, 2025
David Lucking, a partner in Linklater’s US structured finance practice, shares his expertise on Significant Risk Transfer (SRT) transactions. He unpacks the differences between the US and European SRT markets, including varying regulatory frameworks. The conversation delves into how recent policy changes impact lending strategies, especially for small businesses. Lucking also highlights evolving credit events in distressed debt markets and the diverse participants in the SRT market, showcasing the need for adaptability amid shifting market conditions.
AI Snips
Chapters
Transcript
Episode notes
Core Purpose of SRTs
- Significant Risk Transfer (SRT) enables banks to offload credit risk for capital relief and balance sheet efficiency.
- SRTs also help banks free up capital for new lending and business growth opportunities.
SRT Market Maturity Across Regions
- The European SRT market is more mature compared to the US but US activity is growing rapidly.
- SRT involves banks, investors, and insurers especially in Europe through repack-style transactions.
Regulation Shapes SRT Structures
- Regulatory frameworks greatly shape SRT structures and their capital treatment differs by jurisdiction.
- The US lacks a specific SRT framework but recent Fed guidance offers clarity, impacting structure choices.