Regulators Push Banks On Leveraged Loan Underwriting

Law360, New York (March 22, 2013, 1:21 PM EDT) -- With banks increasingly dipping into the leveraged loan markets, federal regulators on Thursday told them to increase their underwriting standards on the financial transactions used in corporate mergers and private equity buyouts as part of new guidance for managing the potential risks lurking in those financial instruments.

The Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency said that they have observed the underwriting standards banks use for issuing leveraged loans "have deteriorated" in recent months as banks, searching...
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