"Unleashing Capital for Europe’s Future: Why Securitisation is a Strategic Financing Superpower"

In the face of unprecedented geopolitical and economic challenges, Europe requires unprecedented investment flows to secure its strategic autonomy--whether advancing the green transition, ramping up digital infrastructure, or reinforcing defence capabilities. The funding demands far exceed the capacity of public budgets. European banks, already finance 70% of the continent's needs, and must remain central actors. But to unlock greater lending capacity without compromising stability, they need effective tools. Securitisation is one of such tools.

Securitisation enables banks to bundle loans — such as mortgages, SME loans or infrastructure finance — into tradable securities for institutional investors (. This process shifts risk to third parties and frees up bank capital for new lending.

Put simply, securitisation increases the velocity of capital, allowing each euro to support more lending over time. Critically, this is about r optimising balance sheets to extend more credit to households, SMEs, and strategic sectors, without compromising prudence.

Lessons from the past: Strong European performance

While securitisation's reputation suffered after the 2008 global financial crisis, . it is crucial to distinguish between causes and consequence. The crisis was triggered not by European securitisation, but by complex, opaque U.S. subprime products, often marketed globally by US Banks, to investors — many of them in Europe — who lacked the knowledge to properly assess the underlying risks in jurisdictions where the local supervisors underperformed their responsibilities.

In contrast, European securitisation products have historically performed remarkably well, with simpler structures, stronger regulatory frameworks, And lower default rates. Since 2008, further safeguards --stricter due diligence, risk retention rules, transparency obligations, -- alongside the STS (Simple, Transparent, Standardised) framework have made

European securitisation safer, more transparent, and more standardised than ever.

The European Economic and Social Committee’s Opinion ECO/681, , strongly supports revitalising securitisation. Endorsing the Commission’s Securitisation Package (COM(2025) 825 and 826), it calls for reinvigorating the market in a targeted and calibrated way to help finance the EU’s strategic objectives — including the green, digital, and defense transitions.

The opinion also urges risk-based, consistent capital standards, improved legal clarity and supervisory convergence— all essential to restore confidence and broaden market access t.

Securitisation is no silver bullet — but it is essential.

To be clear, securitisation won’t replace equity markets or public investment. But it complements them. It empowers small and medium-sized banks to access market, diversifies funding sources and helps match asset- liability profiles more effectively.

By fostering a European investor base for European-originated credit risk, the EU reduces its vulnerability to external shocks and improves financial resilience, and strategic autonomy.

Above all, securitisation is not mere financial engineering, it is a means to keep banks financing the real economy without excessive reliance on public or external capital. If well-regulated and wisely deployed, it can be one of Europe’s most powerful tools to mobilise private capital in service of public goals.

Europe should not allow stigma from past, imported crises hold back a market where European standards, performance, and priorities lead the way.

By Antonio Del Riego, chair of the Study Group on the EESC opinion ECO/681 Review of the securitisation regulation