225 6.1 Introduction Ionw an ss ea cnudr istei zr av ti ci oent ht realnosaancst i tohne, yuonrl ii kg ei n ai nt et, rtahdei toi ownnael rlsehni dp i na gn dwrhi sekr eo ft ht eh el el no adne sr are (partially) transferred to investors. Using this method, a potential conflict of interest might arise when the loan originators have not enough skin-in-the-game, mt h ee aonri inggi n, taht oe rv iass tb ma rae jloy rei txyp (oosre da l tl )o oafntyh er i rs iks. kIsf at hr ee torrai ng isnf eart roerds ht oa vi ne vlei tsttloe r s w h i l e skin-inthe-game, they might have lower incentives to carefully assess and monitor the rI ni s kf asc to, f ctrhi tei cms oa rr gt guaeg et hs atthtaht et hc ae uy soe r, iagni nda itne t ewni st hi t yt hoef , stohlee Gpluorbpaol sFei nt oa nscei ca ul rCi rt ii zs ies. (GFC) that began in 2007 is a direct result of a decline in originators’ screening standards and lack of sufficient portfolio management that was fostered by the originate-to-distribute model of securitization. Ar ant eesx taennds i wv eh be tohdeyr oof rl int eorta tau rme oirntdg ea eg de swhaoswsse tchuer i rt iezleadt i o(ns es he ,i pe .bg e. , t wD eeme ni rdo eg fl auu&l t Jt ahme es isg, n2i0f i1c5a n; tD iemmpyaacntyokf &t hVeasne Hc uermi t ei zrat t, i2o0n0m9 ;aKr keeyts oent at hl . ,e2G0F1C0,) r. eI ng urleast po or sn shea vt oe implemented several rules and regulations for securitization transactions.66 Rreeggualradtiinong tihne tshcereEenuirnogpeaannd mUnoinointoring incentives of originators, securitization 67 (the Securitization Regulation hereafter) has sought to improve the skin-in-the-game of the originators of securities via tf oh re sr ii ms kp rl ee,t etnr at inosnp ar ruel en.t I na nadd ds ti taino dn a, rsdeiczuerdi t iszeactui or ni tsi zcaot imo npsl i a(nS tT Sw iht he r tehaef t ec rr )i t ecraina benefit from preferential capital treatments. The risk retention rule, that entered 66ReSgeuel,aeti.go.n, R(eEgCu)lNatoio1n0(6E0U/)2N00o94o6n2/C2R0A1s3. of the European Parliament and of the Council of 21 May 2013 amending 67 Regulation (EU) No 2017/2402 of the European Parliament and of the Council of 12 December 2017 laying down a general framework for securitization and creating a specific framework for simple, transparent and standardized s1e0c6u0r/it2iz0a0t9ioann,dan(EdUa)mNeon6d4in8g/2D0i1re2c.tives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) No Chapter 6 - Risk Retention in the European Securitization Market
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