News Analysis

Regulatory block

US CRT sector is becalmed and regulators are to blame, say sources

US regulators have blocked regulatory capital relief trades at a time when the mechanism would be of particular value to US banks, say well-placed market sources.

So far in 2022, only Western Alliance Bank (WAB) has issued in the CRT market. Issuers that have been regular presence in the market over the past couple of years, pre-eminently Citi and JP Morgan, have done nothing and are said to be on hold.

Goldman Sachs, which issued a $3bn CLN in 2020, is also on the sidelines, though there are rumours it has something in the works for 2H 2022.

Texas Capital Bank (TCB), which got everyone excited when it became the first US regional bank to venture into the reg cap market in March 2021, has also failed to make a reappearance despite affirming at the time that the inaugural deal would be part of an ongoing programme.

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