Capital market transactions
In order to obtain regulatory capital relief under Basel I, ING Bank had two conduits, with own originated assets and also the senior positions of own originated asset securitisations, called Mane and Simba. These conduits funded these positions with short dated asset-backed commercial paper. The advent of Basel II made these conduits largely obsolete. As a result of the widening of spreads for this paper after the summer and of the fact that alternative sources of funding for ING Bank became much more competitive, ING unwound these conduits in the third quarter of 2007. With the unwind approximately EUR 6 billion of Basel I risk-weighted assets (RWAs) were added to ING Bank as of the end of the third quarter.
Already during the first half of 2007 Capital Management had started to execute internal securitisations to enhance ING Bank’s already substantial liquidity buffer. The AAA rated senior positions of these securitisations can be used as collateral for liquidity. Thus EUR 29.3 billion of collateral was created during 2007.