Finance
UK Government-Owned Firm to Use Risk Transfers to Boost SME Lending
- British Business Bank looking to bring SRT buyers to its deals
- A potential SRT transaction may be agreed on a bilateral basis
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British Business Bank, a government-owned firm, is seeking to use SRTs to help UK-based commercial banks boost lending to small and medium-sized enterprises.
The economic development entity wants to help lenders create significant risk transfers that are linked to the riskiest portions of their loan portfolios. That will reduce the amount of regulatory capital UK banks need to put aside to cover potential losses, allowing them to boost lending, according to Michael Strevens, the head of structured guarantees at the Sheffield-based institution.