Commission’s securitisation proposal is out

Today, the European Commission published its proposals on securitisation within the Capital Markets Union project. Based on an earlier draft leaked by the Financial Times, there was much to commend the Commission’s approach, some items to keep an eye on and some issues which were serious enough to have the potential to derail the chances of market recovery altogether. First, the Commission should be commended for a number of very positive aspects: (a) there is a definition of simple, transparent and standardised (STS) securitisation to be used to bifurcate the regulatory outcomes for this financing channel as a whole; (b) […]

EBA publishes its report on qualifying securitisation

Yesterday saw the publication of the EBA report on qualifying securitisation. The publication follows the public hearing held a couple of weeks ago and sets out the detailed advice provided by the EBA to the European Commission. PCS is still reviewing the 135 pages of the report and is looking forward to the clarifications announced during the public hearing to some of the more technical aspects of the proposed EBA definition of "simple, transparent and standardised" securitisations.

EBA publishes the outline of its advice to the Commission on securitisation

Today, the European Banking Authority held a public hearing and published the outline of its technical advice to the Commission on simple, transparent and standardised securitisation. The presentation has much to commend it. The definition of STS securitisation closely follows the EBA's original proposals with some notable improvements in areas where stakeholders had raised concerns (such as the no-credit impairment requirement). On a number of other areas of concern, we will need to wait for the full report (publication announced for early July) in which the EBA has promised the more detailed answers needed to gauge the definition's suitability. In […]

European Commission publishes responses to securitisation consultation

Today, the European Commission published the responses to the consulation on securitisation within the CMU project. The Commission received 120 responses, indicating the great level of interest in this issue from many different stakeholders. As we understand it, these responses will be reviewed with a view to the Commission publishing a concrete proposal in September of this year. This proposal will center on a definition of "simple, transparent and standardised" securitisation and a regulatory infrastructure bifurcated around such definition. Issues which we believe remain still very much open are the inclusion of rules around synthetic securitisations, asset backed commercial paper […]

Bank of England and ECB respond to the EU Consultation on securitisation

The Bank of England and the ECB released a joint-response to the European Commission Consultation on securitisation. In their response they appear curiously to favour issuer self-certification of quality. This approach, which is not that of the PCS, is quite a bold one in the light of the events that precipitated the financial crisis. It remains to be seen whether it is one that commends itself to policy makers and investors who suffered the consequences of the sales by issuers of purportedly high quality securitisations that then suffered such dramatic losses.

European Commission publishes today a Green Paper on the Capital Markets Union together with a new consultation on securitisation

Today, the European Commission publishes its Green Paper on the Capital Markets Union. In the paper its sets out five priority for early action, of which the building of a sustainable securitisation market is one. Underlying the seriousness with which the Commission is approaching the securitisation brief, together with the Green Paper was published a consultation on securitisation. This consultation, with a May 13 deadline, requests stakeholder views on the notion of a bifurcated approach to the regulation of securitisation similar to that which PCS has been advocating since its inception. In particular, the consultation explicitly addresses the possibility of […]

EBA publishes the responses to its consultation on simple, standardised and transparent securitisations

Following the closing of the consultation period, some of the responses to the EBA's consultation on simple, standardised and transparent securitisations can now be found on the authority's site. These responses came from a variety of sources, including of course PCS.

Delegated Acts for Solvency II adopted but the Parliament still has some questions

Upon the expiration of the deadline for objections on January 10th, the Solvency II delegated acts were adopted. These include, of course, the division of securitisations into two types and the calibrations that are now well known and still considered by many insurance companies as still too high. Of interest however is also the letter from the European Parliament to Commissioner Hill. In the letter, the Parliament asks for a speedy review of the calibrations for infrastructure investments. Although not immediately relevant to securitisation, this is a good sign nevertheless. With the EBA work being done on a definition of […]

Finance Watch publishes a paper on securitisation – remains critical

Despite the enormous progress that has been made in the rehabilitation of high quality securitisation, Finance Watch today published a timely reminder that not everyone is convinced that a return of a safe and strong securitisation market will be beneficial to the European economy. Finance Watch’s position paper on securitisation although mentioning PCS and acknowledging some of the strengths of securitisation, demonstrates that those, like PCS, who believe in the value of this financing channel still have work to do in convincing skeptics and that political support for it must be earned and should not be taken for granted.

ECOFIN asks for a securitisation framework to be developed by the summer 2015

Following its meeting today, the council of European finance ministers (ECOFIN) released a statement covering what it saw as the priorities for Europe. The statement specifically encouraged 'the Commission to develop, a dedicated EU framework for simple and transparent securitisations designed to further maximise consistency, transparency and legal certainty for all stakeholders in the market' and suggested a deadline for the development of such scheme of the summer of 2015. This is very encouraging and consistent with the PCS view that a definition of high quality securitisation should be expected well before the end of 2015. This would allow the […]

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