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Securitisation proposal issued by the European Commission

Securitisation proposal issued by the European Commission

As part of its Capital Markets Union (CMU) initiative, the European Commission has adopted proposals for laying down common rules on securitisation and creating a European framework for simple, transparent and standardised securitisation.

The development of a simple, transparent and standardised securitisation market constitutes a building block of the Capital Markets Union (CMU) and contributes to the Commission’s priority objective to support job creation and a return to sustainable growth . A high-quality framework for EU securitisation can promote integration of EU financial markets, help diversify funding sources and unlock capital, making it easier for credit institutions and lenders to lend to households and businesses.

Securitisation can be an important channel for diversifying funding sources and allocating risk more efficiently within the EU financial system. It would allow for a broader distribution of financial sector risk and can help to free up banks’ balance sheets to allow for further lending to the different categories of economic agent (e.g. non-financial companies, SME, individuals). Overall, it can improve efficiencies in the financial system and provide additional investment opportunities. Securitisation can bridge banks and capital markets with an indirect benefit for businesses and citizens (through, for example, less expensive loans, mortgages and credit cards).