First, banks often use these vehicles to reduce capital charges by more than they reduce the risk associated with the underlying loan pool. This is the problem of limited transference of risk. Banks generally retain the risk of “first dollar” or “second dollar” loss on the underlying assets via various credit enhancements.
Let us avoid the danger of confusing two different trades like the insurer’s and the banker’s, but at the same time let us not be held back by fear of the new. 6  BIS central bankers’ speeches