Securitisation can make an important contribution to financing the digital and sustainable transformation in Europe. This requires a secure, but at the same time deep and liquid securitisation market.
The European Commission’s report of 10 October notes: around 80% of the market participants surveyed consider that the EU Securitisation Regulation has not contributed to improving the securitisation market and in particular the financing of SMEs.
On this occasion, the leading trade and industry associations in Europe, including TSI, have written an open letter to representatives of the Commission and the European Parliament, pointing out the relevance and urgency of reforms. These include in particular:
- CRR III / CRD VI: A reduction of the p-factor is urgently needed in order to actually achieve capital relief through securitisations within the scope of the planned output floor. The current regulations remain too conservative and do not adequately reflect the risk of securitisations, especially in connection with the STS regulations.
- Solvency II: Similar to the regulations for banks, the capital requirements under Solvency II urgently need to be adjusted in order to attract investors from the insurance industry to the securitisation market again. The current requirements are simply inadequate and have made securitisation uneconomic for insurance companies.
- EU Green Bond Standard (EuGBS): The implementation of the EBA approach (see also TSI statement of 14 October 2022) is substantial for the appropriate consideration of securitisations under the EuGBS and the avoidance of further competitive disadvantages compared to other bond instruments.
- Technical regulatory standards: It is essential that market views are taken into account in the current revisions of Level 2 and Level 3 regulations, as the current drafts threaten to further inhibit the securitisation market.
- This includes the following current regulations in process:
- Delegated Regulation on Significant Risk Transfer
- RTS exposure value of synthetic excess spreads (SES)
- RTS Homogeneity
- Revision of the ESMA Disclosure Templates
We must not miss the opportunity to making the European financial markets crisis-proof and future-oriented by treating securitisations appropriately as a source of financing alongside traditional bank loans.