Financial Regulation
Intermediate
Risk Retention
A requirement or contractual arrangement under which an originator, sponsor, or intermediary keeps part of the credit risk associated with transferred assets.
Why It Matters
Risk retention seeks to reduce originate-to-distribute moral hazard, but its effectiveness depends on the retained slice, hedging, capital treatment, screening technology, and market structure.
Selected Literature
A short list of directly relevant archive entries.
1994
Advanced
2010
Advanced
Regulating the Shadow Banking System
Gary Gorton and Andrew Metrick
Brookings Papers on Economic Activity
2010
Intermediate
Regulating Wall Street: The Dodd-Frank Act and the New Architecture of Global Finance
Viral V. Acharya, Thomas F. Cooley, Matthew Richardson, and Ingo Walter
Wiley
Related Cases
1986
Financial Law
FDIC v. Philadelphia Gear Corp.
476 U.S. 426 (1986)
Whether an unfunded standby letter of credit backed by a contingent promissory note creates an insured deposit.
1996
Financial Law
United States v. Winstar Corp.
518 U.S. 839 (1996)
Government contractual commitments made during thrift supervisory mergers and later regulatory change.