What does Part 373 relate to in terms of financial regulations?

Part 373 pertains to Credit Risk Retention, which is a requirement established to ensure that securitizers retain a portion of the credit risk associated with financial assets they securitize. This regulation aims to align the interests of the securitizer with those of investors and other stakeholders, thereby reducing the risk of future financial crises linked to poorly underwritten loans.

Under these regulations, the securitizer must maintain a certain percentage of the credit risk, effectively putting skin in the game. This retention requirement helps to promote more prudent risk management practices and enhances the overall stability of the financial system. It is part of broader financial reforms aimed at mitigating systemic risks and ensuring that all parties involved in credit markets actively manage risk.

Other options, while relevant in their contexts, do not pertain to Credit Risk Retention specifically. Orderly Liquidation Authority is focused on the procedures for the liquidation of large financial institutions to prevent systemic failure. Resolution Plans refer to the strategies that institutions must develop to ensure they can be rapidly and efficiently resolved if they fail. Reserve Requirements deal with the minimum amounts of reserves that banks must hold against deposits, which relates to liquidity management. None of these accurately captures the essence of Part 373 as it pertains to the retention of credit risk.