Risk transfer and the shift from camaraderie to competition

The risk transfer market could be moving into a more competitive, more transactional and, some fear, riskier cycle

The days of a clubby market for synthetic risk transfer (SRT) may be over, as the competition for banks’ business intensifies.

The SRT market, in which banks transfer some of the risk of their loan book to buy-siders, often for yields as high as 16%, is experiencing an influx of new, and new types of investors.  And these buyers of bank risk no longer wait around for calls from bank issuers – nowadays, they make the calls themselves.

The buzz at an annual gathering of risk transfer specialists in