The Financial Stability Board published a final evaluation of the effects of G20 post-crisis reforms on securitisation, concluding that minimum risk retention and higher prudential requirements have strengthened resilience in residential mortgage-backed securities and collateralised loan obligation markets without strong evidence of material negative side-effects on financing to the economy. It cautions that the post-global financial crisis securitisation market has not yet been tested through a full credit cycle, which is particularly relevant given recent growth in CLOs. The assessment focuses on the International Organization of Securities Commissions minimum retention recommendations and the Basel Committee on Banking Supervision’s revised prudential requirements for banks’ securitisation-related exposures. It finds complex structures associated with the crisis have declined and transparency has improved, while risk appears to have been redistributed from banks to non-bank financial intermediation, with banks shifting towards higher-rated tranches. Key issues flagged for authorities include monitoring risks from developments such as synthetic risk transfers and private credit in securitisation structures, assessing the effectiveness of risk retention in CLOs given uneven global coverage and the use of third-party risk financing, and considering the impact of differences in reform implementation across FSB member jurisdictions. The final report reflects feedback on a consultative version published in July 2024, and an overview of consultation responses was published alongside it.

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