BIS puts spotlight on credit risk transfer

In a report published today, the Bank for International Settlements (BIS) highlighted disclosure, concentration and the role of ratings agencies as key features of the credit risk transfer market that may need to be addressed with regulation.

The BIS’s report on credit risk transfer – written by Committee on the Global Financial System working group – echoes concerns raised last year by the Bank of England and the International Monetary Fund (IMF) that a lack of transparency may allow dangerous concentrations of credit risk to develop.

The working group said that its findings on the lack of disclosure about credit risk transfer among banks and insurers may give “grounds for concern”, and that disclosure was “all the more important