Review of the securitisation regulation

Key points

The EESC:

• calls to support the objectives of the European Commission's proposal;
• recommends that the review of reporting templates include standardised environmental, social and governance (ESG) information;
• recommends to take additional measures to address fundamental weaknesses in the existing financing of the real economy and to develop the EU equity market;
• calls to strike a balance between reducing supply and demand barriers, and financial stability, market integrity and investor protection, and urges to avoid weakening international standards to the extent possible;
• proposes to harmonise the various monitoring, reporting and review clauses to strengthen the analysis of the impact of the review on lending; recommend a fast-track monitoring mechanism for bank supervisors to annuallyassess whether freed-up capital leads to real lending, non-retained securitised assets, or is used as collateral; recommends to shorten to two years the assessment and reporting periods to the European Commission from the ESAs, and include the results in the abovementioned fast-track monitoring mechanism;
• recommends that any legislative review assess whether further measures and conditionalities are needed, given the pressing need to expand alternative financing;
• calls to support the proposals for more coherent, consistent and harmonised supervision;
• requests that some proposals in the package are fine-tuned, i.e reviewing some calibration and definition inconsistencies;
• calls to ensure that the technical proposals to make risk weight floors "risk-sensitive" avoid modelling risk and arbitrage;
• recommends to reverse the waiver for securitisations when a first loss tranche is guaranteed by public entities;
• calls for additional measures to preserve the long-term relationship between lenders and borrowers and ensure transparency; discourages both moving origination to unregulated non-banks, and moving securitisation processes to jurisdictions that allow aggressive tax planning.