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 lend. In particular, EU banks cannot rely on securitisation to same extent as their US counterparts". And concludes that "to increase the financing capacity of the banking sector, the EU should aim to revive securitisation and complete the Banking Union."
Of interest is not only Draghi's support for a revival of a strong securitisation market in Europe but also that it has specific actionable measures to propose. These include lower capital charges for simple securitisations and a revision of the disclosure and due diligence requirements. The report also muses on the idea of a platform having public backing. This reflects proposals made, inter alia, in the Noyer Report.
This long-awaited report cannot but be a welcome addition to the now long series of such analyses invariably concluding in the need for Europe to retrieve a stong securitisation market.
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