In all likelihood, securitisation will play an important role in the context of the European capital markets union (CMU) and will effectively help to revitalize the securitisation market, provided that the Hight Quality Securitisation (HQS) project materially reduce the capital charge for securitisation transactions and the STS and STC criteria are clearly defined and can be fulfilled.
Even though the fundamental approach adopted by COM and the EBA is in general very welcome, it has to be stated that it falls short of what would have been possible, to say the least, since its focus is limited exclusively to True Sale securitisations. This exclusion comes as a surprise, since synthetic securitisations have already been used in the past to a considerable extent and possess a proven and solid track record as an efficient tool for risk transfer and capital management.
Stefan Krauss and Frank Cerveny argue in the following article that the reluctance of supervisors as well as reservations in the public opinion are to a large extent due to a lack of differentiation.
Article “Why synthetic securitisations are important for the European Capital Markets Union”