Joint-Committee Report is published - much good, some disappointment, a lot of parcel passing

The Joint-Committee of the ESAs report of the implementation and functioning of the Securitisation Regulation has just been published. As you could probably tell from the inelegant and cumbersome title of the report, this is a document that the European Supervisory Authorities (ESMA, EBA and EIOPA) are required by law to produce every three years. However, this one is important, coming as it does, at a time when the European Commission is mulling over possible deep changes to the European Union's securitisation framework. At 83 pages, it is not a quick read. It contains much that is quite good. It […]

The CMU is dead, long live the SIU!

Yesterday, the European Commission issued a communication on the Savings and Investments Union . For the cognoscenti of European policy, the Savings and Investments Union ("SIU") is not a new initiative but the rebranding of the project heretofore known as the Capital Markets Union or "CMU". So, the CMU is dead, long live the SIU! Reading the communication, as well as the attendant press release, the proposals to reform securitisation's legal and regulatory framework in a constructive manner remains part of the project. (To be found on pages 11 and 12, for those who wish to go straight to it). […]

The European Securities and Markets Authority (ESMA) has just published a consultation on the revision of the disclosure framework for private securitisation under Article 7 of the Securitisation Regulation. The deadline is March 31. Although any improvement on the over-burdensome disclosure regime for securitisations is welcome, this consultation has left some of us more confused than hopeful. First, it is limited to "private" securitisations - legally defined as securitisations that do not require a prospectus under the Prospectus Regulation. Since much of the policy discussions around reviving securitisations from Lagarde to Draghi have centred on growing the capital markets by […]

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 […]

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 […]

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 […]

The only thing arriving seemingly in greater numbers than new public securitisation transactions this March are expressions of support for the market from European policy makers. The same day as the supportive Governing Council of the ECB's statement but maybe less noticed, we saw the publication of the "Statement of the Eurogroup in inclusive format on the future of the Capital Markets Union". The Eurogroup is an informal body created in 1997 in which the ministers from the euro area member states discuss matters relating to their countries' common responsibilities related to the euro. This statement was the result of a […]

More support for securitisation reform from the ECB

Following the speech by Christine Lagarde last November calling for the revitalisation of the European securitisation market as a key priority for the European Union, the European Central Bank has now issued a statement by its Governing Council on advancing the Capital Markets' Union. As in the speech by Ms Lagarde, the statement places the growth of a securitisation market at the center of its recommendations. Together with consolidated European supervision, the harmonisation of insolvency, accounting and securities laws, the improvement of post-trading regimes and the amelioration of the fiscal disadvantage faced by equity investments, securitisation is one of the […]

It is rare for Immanuel Kant's name to be associated with the technical subject of securitisation. Yet this is what happened when Christine Lagarde asked for a "Kantian shift" in respect of the CMU. Taking our cue from such eminent personage, PCS also called on the memory of the great Enlightenment philosopher in an article published in Eurofi's Regulatory Update magazine and entitled, "Securitisation, Europe's categorical imperative".In the article, we set out the reasons securitisation's benefits go well beyond assisting European banks with episodic capital tight spots. Securitisation, by helping at one and the same time both the banking channel […]

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Joint-Committee Report is published - much good, some disappointment, a lot of parcel passing

The CMU is dead, long live the SIU!

ESMA's consultation on disclosure: a puzzling addition to the consultation merry-go-round

Synthetic issuers, it is time to get ready

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

Greek finance minister shares his reasons for supporting securitisation

Good news for Italian banks

Eurogroup adds its support for the revitalisation of European securitisation

More support for securitisation reform from the ECB

Securitisation, Europe's categorical imperative