Investments

Bank regulators debate lender risk rules

How much skin-in-the-game should a bank have?

Reuters says banking regulators are still trying to determine how much risk a bank should carry after loans are sold off onto the secondary mortgage market. The publication elaborates on the ongoing debate:

The Federal Deposit Insurance Corp said on Wednesday that it will meet on August 28 to discuss the credit risk retention rule required by the 2010 Dodd-Frank Wall Street oversight law.

The "skin-in-the-game" rules call for lenders to keep 5 percent of securitized mortgages on their books, with the exception of the most basic loans. The requirement was first proposed in 2011, but has not yet been made final.

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