In summer 2023, the G20 Financial Stability Board (FSB) published a consultation paper on the effects of the amended financial market regulation on the securitisation market since 2008. TSI participated in this consultation together with the German Banking Industry Committee (see TSI kompakt from 22 September 2023). The FSB has now published the results and invited the next consultation phase.
Key contents of the report
Firstly, it should be mentioned that the focus of the report in terms of regions and markets is global and therefore very broad, while the focus in terms of asset classes is rather narrow. This means the focus is only on CDOs/CLOs and the non-government-backed RMBS market. From a regulatory perspective, the analyses focus on risk retentions and the Basel capital requirements for bank investors in securitisations. The FSB argues that this is primarily due to limited access to data.
At first glance, the results of the report are therefore not particularly groundbreaking. The analysis roughly concludes that following the regulatory adjustments, the global securitisation markets have become more resilient and transparent and transaction structures less complex. However, a direct correlation cannot be clearly proven, as there were too many extraordinary macroeconomic factors that also had an influence during this time.
The report, which is over 90 pages long, continues to analyse many details and also provides some interesting data and evaluations on the global securitisation markets. The FSB accompanies the report with 15 consultation questions in order to mirror the results presented with the market and to be able to better evaluate the conclusions drawn.
Next steps
The consultation phase will run until 2 September 2024, during which time the many facets of the report will have to be analysed in detail. The TSI is examining the form in which it will accompany the FSB consultation.