PCS files its response to the UK PRA's consultation on CRR

PCS has filed its response to the United Kingdom's Prudential Regulation Authority consultation on proposed changes to the CRR, including a number of securitisation rules. The proposals are overall going in a positive direction but will fall short, in PCS' opinion, of what is needed both to correct the distortions introduced in UK markets by miscalibrated regulations and to allow UK banks to compete with their international peers on a level playing field. In addition to responding on the precise proposals, PCS's document starts with three point of general application which are of concern: the limits of Basel conformity, evidence […]

PCS, together with many other stakeholders, filed its response to the Commission’s consultation on Europe’s securitisation framework. At 167 questions, there is no doubt the Commission’s survey was comprehensive. At a little over 30,000 words, we hope PCS’ response was too. Reflecting our nature as an independent voice seeking to help revitalize the securitisation market as a safe and strong tool for financing the European economy, our response seeks to present a coherent approach and a middle course between the minimalist posture of some stakeholders, most prominently the prudential regulatory community, and a more radical, and in our view maybe […]

Synthetic issuers, it is time to get ready

It is now official: the new guidelines on the STS criteria for on-balance-sheet securitisations will apply from 9 December 2024. After a consultation phase in 2023 in which all major market participants including PCS participated, the Final EBA Report on the guidelines was published on 27 May 2024 and scheduled to become applicable two months after its translation into all 23 European languages. These translations are now all done. They can be downloaded from the EBA website, and in each case , 9 December 2024 is the date they come into force. Quoting the EBA: "the Guidelines on the STS criteria […]

For those who, seeing the European Commission's consultation deadline of 4th December, were fearful that they may for once have no excuse this Christmas to slip away from burdensome family commitments, the United Kingdom's Prudential Regulation Authority has ridden to the rescue. They published yesterday their own consultation on CRR amendments: deadline, January 15. A few things to note. First, the consultation is on capital requirements generally and so goes beyond only securitisation issues. Secondly, securitisation does feature prominently and with some meaningful proposals including a new "formula" based p factor and a proposed nod to unfunded SRT synthetics - […]

And it begins... European Commission publishes its consultation on securitisation

The last few months have seen numerous calls by eminent people to takes steps to reform the regulations governing securitisations and thus revitalise of the market on a sound basis. Today the European Commission, by publishing its consultation. formally started the process that, with a fair wind, could result in those hoped for reforms. A (very) quick scan of the document reveals a number of things. First, it seems to be quite exhaustive, covering all the main topics identified as relevant. These include LCR eligibility, Solvency II and the possible addition of unfunded synthetics to the STS category, as well […]

PCS was honoured to receive Mr Hatzidakis, the Finance Minister of Greece, as the keynote speaker at our Athens symposium last week together with Dr Lazarakou, Chair of the Hellenic Capital Markets Commission. Mr Hatzidakis shared his views on how securitisation had been a vital component of the Hellenic Republic's financial recovery after the devastating blows that followed the sovereign crisis of 2012. In particular, the minister spoke of the Hercules program, devised and piloted by the former deputy finance minister, Mr George Zavvos who also was kind enough to participate in the PCS symposium. The minister explained how Greek […]

The Draghi report on the future of European competitiveness was published today. It's sixty five pages cover a lot of ground, and if you want to truly dive in, you can read the 327 pages of the in-depth analysis companion document. If, like us, you have broad interests but are currently focusing on securitisation, we invite you to go straight to pages 60 and 61 of the main report. These contain both strong and explicit support for a revival of securitisation. The report notes, for example, that "EU banks also face some specific regulatory hurdles which constrain their capacity to […]

Last week the Financial Stability Board, an emanation of the G20, published what it called a "consultation report". The report is entitled "Evaluation of the Effects of the G20 Financial Regulatory Reforms on Securitisation". At over 90 pages, we wanted to have a careful read before reporting on its content. The first conclusion is that, notwithstanding the very broad title, the report is deliberately narrow in the topics it chooses to cover. The FSB explicitly states that it has focused solely - on the policy side - on the retention rules and the prudential capital requirements for bank investors. Other […]

In one of those highly technical yet genuinely impactful regulatory decisions, the EBA issued an opinion backing a decision of CONSOB on collateral for synthetic transactions. Briefly, you cannot have an STS synthetic transaction unless it is either in the form of a credit linked note (CLN) or it is cash collateralised. In Italy, for legal reasons, CLNs do not work. Further, the rules prohibit the cash collateral from being held by the originating bank unless that bank is at least CQS2. Again, in Italy, because of issues relating to rating agencies’ sovereign caps, banks are not CQS2. This meant […]

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PCS files its response to the UK PRA's consultation on CRR

2024 - The Year In Review

Everything you need to know about reforming Europe’s securitisation rules… and some you don’t

Synthetic issuers, it is time to get ready

UK PRA publishes its consultation on capital requirements, including many securitisation proposals

And it begins... European Commission publishes its consultation on securitisation

Greek finance minister shares his reasons for supporting securitisation

Draghi report published - securitisation gets a supportive mention

FSB report cum consultation - a surprisingly (if deliberately) narrow document

Good news for Italian banks