With the increasing volumes of Synthetic Risk Transfer (SRT) and Credit Risk Transfer (CRT) along with the discussion of BASEL III, we thought it would be useful to re-issue our comment letter to FHFA on the capital treatment of Credit Risk Transfer. 

CRT is not quite the same as either equity or debt from a capital perspective; however, capital rules often attempt to categorize them this way and then add ad hoc adjustments. Our comment letter addressed an appropriate framework for understanding the risk reduction impact of CRT transactions.