Significant Risk Transfer deals let banks protect themselves from credit losses, with investors taking on the junior risk of loan portfolios.

As the hottest market of last year, new investors piled in to buy the deals, and heavy demand from inexperienced SRT buyers has allowed banks more freedoms and weakened documentation — which could lead to fights down the line.

In the spotlight are the critical mechanics which allow the SRT market to protect banks - how protection is triggered, and how losses are calculated.