Eagle Point
What is Regulatory Capital Relief (RCR)?
Regulatory capital is the amount of capital that banks are required to have on hand at any given time. This capital is designed to ensure that banks and, consequently, the financial system, can weather economic stress. Think of it as the buffer of the banking system, protecting depositors and the economy as a whole.
RCR, also known as synthetic risk transfer (SRT), is a financial strategy that allows banks to keep their portfolios and relationships intact while raising capital. It also allows banks to optimize the amount of capital they need to hold for a given portfolio of assets in accordance with banking regulations.
