Global regulators urge closer watch on bank risk transfer deals as market surges
Global regulators warned on Tuesday that the surge in bank risk transfers needs closer monitoring. These deals create new links to shadow banking sectors.
Insights:
The Basel Committee on Banking Supervision issued a report on Tuesday, February 17, 2026, warning that the growing use of synthetic risk transfers (SRTs) by banks to shift credit risk to private investment funds (hedge funds, pension funds) has surged, potentially creating new vulnerabilities for the global financial system. The committee stated that this heavy reliance on SRTs links bank lending directly to the health of non-bank intermediaries / shadow banking sector and could disrupt credit flows, necessitating closer monitoring by supervisors and market participants.
