In the Marketplace

To view the full report, visit www.fitchratings.com.

City National Bank of Los Angeles has named David W. Maurer senior vice president and manager of its new Equipment Leasing Department. The new department will be a general-purpose lessor, focusing primarily on commercial equipment commonly used in the small and midsize middle market, including everything from computers to manufacturing machinery. The department is scheduled to become operational in the fourth quarter, and Maurer will oversee the formation of the team. He joins City National from Bank of the West, where he was vice president and manager of direct leasing for more than 3 years. He helped create a leasing subsidiary for Sanwa Bank California/United California Bank, and following the merger with Bank of the West, managed all direct lease marketing and middle-market lease syndication.

In connection with a report published by Fitch Ratings exploring the quantitative impact of the Basel II capital charges on a range of structured transactions typical of deals in the marketplace, the company found that Basel II will have an important effect on the securitization activity of banks by creating a new framework for how banks measure and allocate capital against credit risk.

The report, Basel II: The 'Bottom-line' Impact on Securitization Markets, evaluates the amount of Basel II capital that banks must hold on an unsecuritized pool of assets in comparison to holding a securitized structure of these same assets. It details how the new capital framework might affect investment flows within structured product markets. Fitch finds that banks could potentially face lower capital charges by investing in rated securitization structures rather than by directly holding a comparable pool of unsecuritized assets, particularly for credit card asset-backed securities (“ABS”), commercial mortgage-backed securities (“CMBS”), and residential mortgage-backed securities (“RMBS”). Fitch also notes that Basel II could influence how banks structure their securitization deals as they “will face strong pressures under Basel II to minimize their exposure to sub-investment grade tranches, given the significant amount of regulatory capital they will have to hold against these positions,” according to Krishnan Ramadurai, Senior Director, Financial Institutions, Fitch Ratings.

The ultimate effect of Basel II on the securitization markets will depend in large part on how banks identify and respond to these new regulatory capital incentives. According to Kim Olson, Managing Director, Algorithmics, “the impact of Basel II on a bank's decision to securitize a portfolio of assets will depend on a complicated interplay of factors, including, for example, the inherent default risk and recovery rates of the underlying assets, the type of asset or product being securitized, the tranching of the resulting securitization structure, and the features or conventions of the structuring process, such as excess spread and reserve funds.”

To view the full report, visit www.fitchratings.com.

City National Bank of Los Angeles has named David W. Maurer senior vice president and manager of its new Equipment Leasing Department. The new department will be a general-purpose lessor, focusing primarily on commercial equipment commonly used in the small and midsize middle market, including everything from computers to manufacturing machinery. The department is scheduled to become operational in the fourth quarter, and Maurer will oversee the formation of the team. He joins City National from Bank of the West, where he was vice president and manager of direct leasing for more than 3 years. He helped create a leasing subsidiary for Sanwa Bank California/United California Bank, and following the merger with Bank of the West, managed all direct lease marketing and middle-market lease syndication.