ECB Could End Up Imposing ‘Soft’ SRT Limits, JPMorgan Says

The ongoing boom in synthetic risk transfers may eventually prompt the European Central Bank to rein in the practice, analysts at JPMorgan Chase & Co. said.

“European regulators have expressed concerns around potential systemic risks their growing usage may pose,” analysts including Gareth Davies wrote in a note published Friday. As a result, “the ECB may begin to impose soft limitations on the extent” of SRT deployment, they said.