UK government looks to sell senior protection

Tuesday, January 20, 2009

Yesterday the UK Treasury announced that it plans to offer protection against credit losses to banks above a first-loss threashold - in effect, taking the senior tranche of a synthetic CDO - in exchange for a fee

Comment by: Mike Peterson. Posted 15 years ago [2009-01-20 11:10:20]

As an update to this article, it appears that the Treasury's current thinking is that this protection will take the form of an insurance policy and not a guarantee or swap. In other words, if losses reach above the threashold, the bank would be able to make a claim for compensation to the Treasury.

CLOs

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