Basel Committee Analysis of Synthetic Risk Transfers

Basel Committee Publications

Published February 17th, 2026

Detected March 13th, 2026

Summary

The Basel Committee on Banking Supervision has published a report analyzing Synthetic Risk Transfer (SRT) transactions, which allow banks to transfer credit risk to counterparties. The report notes the rapid growth of SRT markets, with protected assets averaging 1.1% of total bank assets globally.

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What changed

The Basel Committee on Banking Supervision (BCBS) has released a report detailing the growth and implications of Synthetic Risk Transfer (SRT) transactions. These transactions allow banks to transfer credit risk from a pool of assets to a counterparty while retaining ownership of the underlying assets. The report indicates that SRT markets have expanded significantly over the past decade, with assets protected by SRTs representing an average of 1.1% of consolidated total assets for banks in various jurisdictions, estimated at EUR 750 billion in key markets like Canada, the euro area, the US, and the UK.

While SRTs are seen as a source of capital relief and risk management for banks, the report acknowledges potential risks, including increased dependence on non-bank financial intermediaries (NBFIs). The BCBS emphasizes the need for continued monitoring by supervisors due to the ongoing growth of these markets and potential "blind spots" related to disclosure and financing activities, despite regulatory reforms implemented since the 2008 financial crisis. Regulated entities, particularly banks, should be aware of the evolving landscape of credit risk transfer mechanisms and the supervisory focus on these instruments.

What to do next

Review the BCBS report on Synthetic Risk Transfers to understand market trends and supervisory focus.
Assess current use of SRT transactions and associated risks, particularly concerning NBFIs.
Stay informed on potential future guidance or supervisory expectations related to SRTs.

Source document (simplified)

Synthetic risk transfers

This version

BCBS | Other | 17 February 2026 | Status: Current PDF full text (1,418kb) | 31
pages Topics: Credit risk, Macroprudential / systemic importance Synthetic risk transfers (SRT) transactions involve transferring all or a portion of the credit risk of a pool of assets to a counterparty while the bank retains ownership of the underlying assets. The investor base in SRTs is dominated by private investment funds, although public sector entities also play an important role in some jurisdictions. Capital and credit risk management are the main motivations for banks to engage in SRTs.

The report is part of the Committee's continued monitoring and investigation of the interconnections between banks and non-bank financial intermediaries (NBFIs).

The report finds SRT markets have grown rapidly over the last decade, and SRT investors constitute an important source of capital relief for corporate credit risk. Assets protected by SRTs as a percentage of consolidated total assets of banks in individual jurisdictions range between 0.9 and 1.8% with an average of about 1.1%.

The total value of protected assets in Canada, the euro area, the United States and the United Kingdom, jurisdictions in which SRT markets are particularly vibrant, is estimated at about EUR 750 billion, or 1.1% of total bank assets.

Regulatory and supervisory reforms implemented since the 2008 Great Financial Crisis (GFC) make SRT securitisations simpler and result in more scrutiny relative to credit risk transfer transactions in use before the GFC. Some jurisdictions and market participants are of the view that blind spots remain related to disclosure and SRT financing activities.

Risks associated with SRT use, such as banks' increased dependence on NBFIs, are acknowledged and, to some extent, actively managed by market participants. However, they merit continued monitoring by supervisors as SRT markets continue to grow.