231 stolicaes othf ethveertrtiacnaslapcatriot.n while in the VES the upright portion is retained, referred EBA (2014b) explored the possibility of adding a sixth retention method that af ol lromwos far ceot emnbt ii onna .t iHoonwoef vt he re, Vt hEeSy mh ae vt he ocdo na cnldu dt heed Ft hLTa tm, aept ahrotdf ,r ao ms o tchaol lseedf i‘ vLe- sfho ar pmes’ of risk retention already available, no other form should be considered. The current methods are deemed sufficient and by providing more options it might well be that the chosen form is not as effective in aligning interest and reduce risks. EBA also concluded that the ‘L-shape’ retention option explored would add tLo-sthhaepceomfoprmlexoiftyreotfemnteioasnuirsinalglothweendebtyecroegnuolmatiicoinn.terest. In the United States, an 6.2.2 Related literature Since the introduction of the risk retention rule, a still rather scarce but growing bmoi dx ey do. f Ol i nt e trha et uor ne eh ahsa bn ed e, nl i tcerreaattuerde. I(ne t. ge .r, eVsat innagsl cyo, t, h2e0e1m7 )p ipr ri coavli de ve isd ee vnicdee ins crea tt hh ea rt the FLT method is best aligning the interests between the tranche retainer and investor. For example, Kiff and Kisser (2014) and Malekan and Dionne (2014) ai nr cgeunet itvhea tb teht we eVeEnS tmh ee tohroi gdi,ncaot mo rpaanr de di nt voetsht oe rFsL. TT, hi se sneost t ou pd ti ei ms aa lr ef oirn af al ivgonri nogf tt hh ee FLT method and argue that this method creates better screening and monitoring ei nf fvoersttso rbsyd et hmea nr de t aa i ns iegrn. i Lf iickaenwt liys el ,o wHei br bpeol nr t i aonndo fOrsitsekr kparme mp i u( m2 0 w2 0h)e nf i nt hde tFhLaTt methods is used, compared to the VES method. On the other hand, Bektić and Hachenberg (2021) for example, hypothesize that wn oi tt hn et hc ee sFsLaTr i (l yh ao lri igznoendt a. Il n) mt h ee tFhLoTd m, t he tehiondt e, trhe es tt roaf nt chheeorrei tgai ni naet ro br eaanrds i(npvaer st toofrt ha ree) Chapter 6 - Risk Retention in the European Securitization Market
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