WASHINGTON Federal banking regulators are scheduled to publish in the Federal Register today an interagency proposal that would require banks to hold $1 of capital for each $1 of residual interest in pools of high-risk securitized loans.
Under the proposal, which the Federal Deposit Insurance Corp. board approved Aug. 15, banks would not be permitted to use residual interests the interest an institution retains after securitizing and selling assets to satisfy more than 25% of their regulatory capital requirements. The proposal will be out for comments for 90 days.
