“Securitization will lose its capital advantage in many cases now that ABS programs have to be consolidated on bank balance sheets.”
You know, now they’ll take less risks securitizing since you actually have to keep track of it someplace – like on your balance sheet.
A tougher regulatory and legislative environment combined with new accounting rules and tighter lending standards have all worked to clamp down on credit card ABS supply this year.
Accounting changes requiring lenders to move securitizations, once held in separate bankruptcy remote trusts, back on to their balance sheets has reduced the appeal of securitization as a funding tool for some issuers.