Joint ECB and Bank of England report on securitisation is published

A few hours ago, the Bank of England and ECB released the recently announced report on securitisation entitled: "The case for a better functioning securitisation market in the European Union". PCS is reading the document and will be providing comments as soon as we have digested the contents. The report may be found here.

Senior IMF official supports the ECB/BoE approach to high quality securitisation

In the first sign that, following the ECB/Bank of England paper, the debate over the regulatory treatment of high quality securitisation is obtaining a foothold on the global agenda, Jose Viñals, a senior IMF official, spoke favourably of the approach championed in the joint communication. His comments were made in an interview with Borsen Zeitung and picked up by Reuters. (The Reuters piece may be found here and the original interview in German may be reached through here - but is behind a pay wall).

Joint ECB-Bank of England paper on securitisation is published

Today, the Bank of England and the ECB published the recently announced joint paper on securitisation. The paper supports strongly the value of high quality securitisation. Acknowledging the many macro-economic reasons for the low level of current European issuance, the paper also identifies the need to incorporate in the proposed regulatory schemes a single definition of high quality securitisations and to calibrate the prudential rules based on the actual performance of such securitisations. Reflecting arguments that PCS has been putting forward since its inception, we strongly welcome this short but focused and to the point contribution. What makes this paper all […]

European Commission requests the advice of the EBA on "high quality securitisation"

The European Commission has stated that it had put a formal request for advice with the European Banking Authority for the authority's views on the possibility of defining a category of "high quality securitisations" to be used in banking regulations. This could presage the possibility of the various banking regulations mandated by the CRD and the CRR following a similar approach to that outlined in the recent EIOPA report on the capital requirements for insurance companies. In its recent proposals, EIOPA defined a high quality securitisation category with lower capital requirements. This approach, which PCS has long advocated, opens the […]

EU Commission publishes a communication on long-term financing: strongly supportive of high quality securitisation and harmonising regulations

Today, the EU Commission published its communication on long-term financing. Both this document and Commissioner Barnier in his press conference put strong emphasis on reviving the securitisation market. Even more importantly, the document identifies the need to craft a definition of high quality securitisation and to harmonise all the relevant regulations around this definition. This is a position that PCS has long advocated and strongly welcomes. It matches very closely both the work that PCS does and its mission. We urge all stakeholders in the securitisation market to rally behind this approach that now has clear support from policy makers […]

European Commission holds public hearing on LCRs - negative signalling on securitisation

Yesterday, March 10th, the European Commission held a public hearing in Brussels on the leverage ratio and LCRs. The meeting was attended by over 200 stakeholders. On the much raised issue of the inclusion of securitisations in the definition of high quality liquid assets, the Commission said it was open to reviewing the matter, but also indicated that it was not minded to change the position outlined in the EBA report. Citing the desire to stick to the Basel recommendations, the Commission also indicated that it was aware of the arguments that had been raised over the EBA's report and […]

Another article in the Financial Times addressing the ECB's desire to see securitisation return

In an article today entitled "Draghi seeks to revive reviled loan bundles to boost credit", the Financial Times speaks of the desire expressed by President Draghi to see a return of high quality securitisation. The article may be found here (although it lies behind a pay wall).

Draghi calls for regulation to distinguish between good and bad securitisation to revive the market

In his contribution to the panel on the "Global Economic Outlook" in Davos on Friday 25th January, Mario Draghi spoke about possible actions of the ECB. He strongly hinted that the ECB could buy securitisations but noted that the market, at present, was basically "dead". However, he also stated that if regulations could distinguish between good and bad securitisations, the market may return. This indicates an ever increasing held view, amongst European policy makers, that the key to a return on the securitisation market lies, of necessity, in the bifurcation in regulatory frameworks between high quality securitisations and others. This […]

Global Risk Regulator publishes a good article on the current state of securitisation regulation

The most recent edition of Global Risk Regulator contains a very good article on the current state of securitisation in Europe and entitled "Regulators offer hope for European securitisation: New proposals for banks and insurers are more nuanced, but industry fears that capital rules are still too severe". PCS is mentioned and quoted extensively. The article can be found here. (It is behind a pay wall).

Following the publications by the European Banking Authority of their report to the Commission regarding the definition of high quality liquid assets and by the Basel Committee of its new consultation on the capital weightings for bank holdings of securitisation, EIOPA published on December 19th its report on capital requirements for insurance companies under Solvency II. This last document (to be found here) represents a very mixed result for securitisation. On the one hand, following a request from the European Commission to revisit it original proposals, EIOPA has sought - in the new document - to define a category of […]

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