Securitisation is receiving a tailwind from EU institutions. After the French and German finance ministries (see TSI kompakt article from 13 September 2023) and Christine Lagarde as president of the ECB publicly pointed out the importance of securitisation as a financial instrument in the context of the Capital Markets Union, the call for more securitisation has become binding: the Eurogroup consisting of the EU finance ministers has given the European Commission a mandate to analyse the securitisation market.
Eurogroup issues mandate to EU Commission
Specifically, it calls “to comprehensively assess all the supply and demand factors holding back the development of the securitisation market in the EU. This assessment should cover, inter alia, the adequacy of our toolbox, including the prudential treatment of securitisation for banks and insurance companies and the reporting and due diligence requirements.”
ECB sees securitisation in a key role on the road to the Capital Markets Union
In its decision of 7 March 2024, the ECB Governing Council also emphasised the need to achieve the Capital Markets Union. It points out that the EU needs more than mere political will – it is time for a “real” action plan to realise the Capital Markets Union. The ECB cites the promotion of the securitisation market as the first instrument on the way to achieving this. In particular, the following points are to be addressed:
- Capital requirements, reporting obligations and due diligence rules,
- additional options such as public guarantees and further standardisation.
Statements by the EU institutions very welcome
We are expressly in favour of the efforts of the Eurogroup and the ECB and will gladly support the resulting projects. The aim must be to implement the current resolutions and requests through bold measures and to finally get the Capital Markets Union off the ground.