A legal framework for simple, transparent and standardised securitisation

Key Points:

The EESC

• welcomes the proposals to establish a system of "simple, transparent and standardised" securitisation (STS securitisations) and to amend the framework in respect of prudential requirements for credit institutions and investment firms;
• calls for action on this in the short term that should enable significant additional resources to be generated for bank funding. That is very important, for SMEs and households in particular;
• feels that bank funding and market-based funding should be considered complementary rather than competing and developed hand in hand;
• wants the rules to be sufficiently broadand and the STS criteria be realistic and feasible for all banks, both the large banks and the small local banks, which are involved in issuing bank loans;
• wants that securitisation be equally attractive to investors. There should be clarity as to the risk involved and who bears that risk, taking account of the whole chain from the issuer to the investor;
• feels that the important thing now is that the mistakes of the past are not repeated;
• concurs with the view that small investors and consumers should not have access to securitisation due to the complexity and risk involved. The Committee calls for a formal prohibition to be explicitly included in the texts.