Wall Street’s Hot Trade Is Booming as SRT Issuance Surges (2)

The value of banks’ synthetic securitizations has surpassed $670 billion, expanding at a double-digit pace as lenders race to offload risk and free up capital.

The figure, the portion that banks retain after partially shifting the peril of loan losses through significant risk transfers, is an 18% increase for the 2024 financial year from the prior period, according to data compiled by Bloomberg. The metric is a proxy of activity in one of financial markets’ hottest corners.

The surge in deals helped Banco Santander SA to overtake Barclays Plc as the biggest user of SRTs. The Spanish bank’s exposure to ...