Goldman Sachs, Morgan Stanley, and Bank of America scrutinize the leverage usage of SRT buyers

Insiders claim that US banks such as Goldman Sachs, Morgan Stanley, and Bank of America are asking investors to disclose whether they plan to take on additional debt to invest in Significant Risk Transfer (SRT) tools. Currently, regulators are reviewing whether these tools pose a threat to financial stability. Over the past few months, investors have been asked this question when the promotion process begins. Authorities are currently warning investment companies wishing to purchase SRTs about using leverage. SRT is a transaction that helps banks sell risks associated with their loan portfolios. Since the provider of debt will be another bank, to some extent, credit risk is merely transferred to another part of the financial system.