Participants in Europe's residential mortgage-backed securities market are waiting to see how the sovereign-debt crisis develops and whether it will lead to more problems for the banking sector. British and Dutch RMBS have offered encouragement. "We have not been too busy this week," one European trader said. "General sentiment has turned a bit nervous, but that is noticeable in all markets, so RMBS is not an exception. Spreads have moved somewhat wider, but there is a definite difference between the southern regions on one hand and UK and Dutch RMBS on the other."

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