We have previously referred to the issue of capital calibration for securitisations purchased by insurance undertaking as the "Cinderella issue". Of all the issues on which the European Commission has asked the ESA's to provide advice, it is both the least noticed and yet, in our view, the most important of the unfinished reforms begun with the passing of the Securitisation Regulation.
Today, insurance companies are holding a minuscule percentage of securitisations in their books - just above 2%. Their holdings of high quality STS securitisations are in homeopathic amounts at around 0.05%. Yet, if we are to see a revival of a securitisation market in Europe that mobilises non-bank savings to fund the economy, the return of insurance companies is essential.
Yesterday, EIOPA, as part of gathering evidence for its report to the commission, issued a consultation (here)
PCS welcomes this consultation and urges all concerned stakeholders to participate. We note though with some disappointment the very short period in which the market is asked to respond . The deadline for responses is 13 July. Less than four weeks in the summer months for a consultation likely to be heavy on data that needs to be gathered and marshalled seems unnecessarily challenging.