Provision in House bill lets banks pass along all CMBS risk

12/17/2009 | Bloomberg

A financial-regulation bill passed by the House last week contains an exception that lets banks effectively pass along all risk associated with commercial mortgage-backed securities issues. One part of the bill requires banks to retain 5% of the credit risk when commercial mortgages are packaged as CMBS. Another part of the bill provides an exemption when an investor in noninvestment-grade parts of the offering provides due diligence on all individual loans.

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