DBC 2441 - Synthetic Securitization (Significant Risk Transfer - SRT)

 

The Banking Tutor 

               Daily Banking Concept -  2441

                      Synthetic Securitization 

(Significant Risk Transfer - SRT):

 

Synthetic Securitization is a  mechanism where a bank uses credit derivatives or financial guarantees to transfer the credit risk of a portfolio to investors, without selling the actual loans, allowing for the retention of client relationships while optimizing capital.