European banks boost synthetic risk transfer volumes to €378 bn in 2025, up 170% in four years
Executive summary: Banks in Europe increased their use of synthetic risk transfer instruments, with the outstanding volume hitting €378 billion in 2025, up 170% over the preceding four years. The rise reflects banks' search for capital relief amid tighter regulatory standards, but it also raises concerns among supervisors about the transparency and systemic impact of SRT arrangements.
Who is involved: Major European banking groups, regulators such as the ECB and EBA, and investors monitoring bank capital metrics.
Likely next: Regulators may launch thematic reviews or issue guidance on SRT usage; banks could face stricter disclosure requirements or limits if concerns persist.
Data from Expansión show that banks are increasingly turning to synthetic risk transfer (SRT) tools to improve solvency ratios. The SRT market grew sharply, reaching €378 billion in 2025, a 170 % increase since 2021. While the tactic helps banks free up capital, regulators have warned that the opacity of such structures could hide risks and undermine financial stability.
Timeline
- — Los bancos disparan la cesión de riesgo pese a la preocupación de los reguladores (Expansión)
Analysis — what this means
Sectors affected
- banking
- capital markets
- synthetic risk transfer
Sources
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