Review of the legal framework for securitisation in the EU

Key points

The EESC:

• believes that improving the securitisation market can broaden investment opportunities, expand access to credit, and advance the capital markets union;
• considers appropriate to carry out an assessment on the effectiveness of the legal framework of securitisation, including market infrastructure, efficiency and transparency, and exploring adjustments in reporting and due diligence requirements;
• recommends that any evaluation of the implementation of the regulatory framework includes an analysis on the impact of securitisation on financing the real economy;
• suggests that efforts to stimulate securitisation concentrate on producing additional funding to the real economy, with a focus on households and businesses;
• considers that securitisation should be complementary to other existing capital instruments, such as covered bonds, but bearing in mind that securitisation is the only instrument that allows to free-up capital for banks;
• believes that extending disclosure requirements on sustainability or introducing a framework on "green securitisation" may add value for investors, who would appreciate it to measure their share of environmental, social and governance (ESG) investments, to assess ESG-related risks, and as a comparison tool;
• suggests to reduce timeframes and further standardising and harmonising the requirements for significant risk transfer recognition;
• considers that progress on harmonising, for instance, contract law, insolvency law, and taxation, would improve the feasibility of cross-border pooling and inssuance;
• welcomes the consultation process by the European Commission, and recommends that the EU actively collaborates in the ongoing consultation of the Financial Stability Board.