Today, hot on the heels of the European Commission's very positive communication on securitisation, Dame Clara Furse of the Bank of England gave a speech where she stated that the Bank would "assess and, where necessary, act to promote a better functioning securitisation market in the United Kingdom".  This adds further support for the new consensus which appears to have emerged amongst policy makers across Europe in favour of a strong return of a high quality securitisation market.  The Bank of England link may be found here (with a link to the full speech) and the Reuters coverage here.

In a front page article appearing in today's Financial Times, Andy Haldane from the Bank of England expressed strong support for securitisation.  Both the statements and the tone are significant in that, following Mark Carney's support a few weeks ago, they move the Bank of England from a "neutral" position toward securitisation - recognising that it can be done well and safely - to a "positive" position - extolling the benefits that it can bring, when done well and safely.  This is a thoughtful piece and a key moment in the rehabilitation of securitisation.  The article may be found here.

In its November Financial Stability Report, the Bank of England has expressed strong support for securitisation as a financing channel.  It has expressed the desire to see a return of a securitisation market and has identified temporary reasons and possible structural reasons for the weakness of existing issuance.  PCS strongly agrees with the identified temporary reasons - deleveraging, central bank liquidity, regulatory uncertainty and a lingering stigma against the product from some investors.  PCS also notes the tentative identification of structural impediments to a return of the market: lack of standardisation of documents and structures, difficulties in modelling and the absence of ways to overcome high fixed costs for smaller issuers.  We agree that these "may" be impediments but, in agreement with the Bank of England, do not believe the importance of these impediments is very clear.  The comments on securitisation can be found on page 46 of the report that may be found here.

In a speech given in London at an event to celebrate the 125th anniversary of the Financial Times, Mark Carney, Governor of the Bank of England outlined what he saw as the tasks of the Bank in the coming years.  "Accordingly, I will concentrate today on three core elements of the Bank of England’s new Financial Stability strategy: creating resilient global banks, building robust markets and conducting central banking for global  markets. These initiatives support a fourth leg of our strategy: improving the supply of finance in the UK. You will hear more about supply-side initiatives, aimed for example at rebuilding securitisation and supporting SME lending, in coming months."  These statements, when added to similar sentiments expressed by President Draghi at the European Central Bank, Commissioner Barnier at the European Commission and senior policy makers across Europe, indicate that the belief in the need for securitisation coupled with an understanding that robust high quality securitisation is achievable is now becoming the new consensus across Europe.  The full speech may be found here.