Eurogroup adds its support for the revitalisation of European securitisation


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 request by the Euro Summit for the group to look into how to give the European Union a deep and effective capital market.

A number of items are worth noting. First, the development of a deep securitisation market is one of the thirteen recommendations made by the group. It is also one of the very few recommendations relating directly to the fixed income markets. This shows the growing consensus amongst policy makers of how essential the securitisation market is to any hope of creating a capital market able to fund Europe's future, a topic we have written about extensively.

Secondly, and in common with the ECB, the Eurogroup identifies the regulatory framework as the main choke point keeping European securitisation at such low levels compared to its international peers. It seems therefore clear to them that improvements to the current regulatory rules are the key to unlocking the growth of a safe but deep European market. Going beyond generalities, the Eurogroup specifically mentions bank and insurance prudential requirements, due diligence and disclosure rules as the relevant topics to be investigated.

This report was written to help set out the agenda for the next Commission whose appointment will follow June's European parliamentary elections.

Eurogroup adds its support for the revitalisation of European securitisation
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