European Commission publishes a Green Paper on long-term financing of the European economy – securitisation is mentioned as one of the financial channels that could unlock additional long-term funding

Today, 25th March 2013, the European Commission publishes its Green Paper on the long-term financing of the European economy. (http://europa.eu/rapid/press-release_IP-13-274_en.htm?locale=en)

The Green Paper contains very positive comments on securitisation, including the following paragraph:

“Reshaping securitisation markets could also help unlock additional sources of long-term finance. Subject to appropriate oversight and data transparency, they can help financial institutions free capital, which can then be mobilised for additional lending, and manage risk.

Market-based initiatives to stimulate securitisation markets include emerging labels for high quality, transparent and standardised securitisations. There is scope to develop simple securitisation products based clear and unleveraged structures, using well-selected, diversified and low-risk underlying assets. Dedicated markets especially for SMEs and adequate prudential rules and supervision systems are important topics.”

We note the positive reference to labels for high quality securitisations and see it as an encouragement to further develop the PCS initiative.

The Green Paper also extends an invitation for comments on how long-term finance in Europe could be strengthened.

PCS intends to respond by the deadline of June 25th.