The CMU is dead, long live the SIU!

Yesterday, the European Commission issued a communication on the Savings and Investments Union . For the cognoscenti of European policy, the Savings and Investments Union ("SIU") is not a new initiative but the rebranding of the project heretofore known as the Capital Markets Union or "CMU". So, the CMU is dead, long live the SIU!

Reading the communication, as well as the attendant press release, the proposals to reform securitisation's legal and regulatory framework in a constructive manner remains part of the project. (To be found on pages 11 and 12, for those who wish to go straight to it).

As always, it pays to read these things with an eye to the detail. Even though the references to securitisation are short, they provide some important information. Basically little has changed from the first CMU communications. This is a good thing. In particular, the Commission mentions the need to look at due diligence, disclosure and the capital requirements for both banks and insurance companies. That the four key elements remain is a positive. Less so is the absence of any reference to changing the rules on the eligibility of securitisations to the liquidity coverage ratio pools of banks.

Also, a subtle change has occurred in the discussion of the platform. The idea of a pan-European securitisation platform with possible public guarantees and not dissimilar in concept to the US Fanny Mae as originally floated in the Noyer Report seems to have given way to a reference to "private sector or Member States’ initiatives, including the creation of platforms" in the plural. So no European Fanny Mae on the horizon; at least not at this stage.

There is also a delphic reference to some role for the EIB in contributing to the development of the securitisation market. Watch this space.

Finally, the Commission is sticking to its ambitious timetable for a Q2 2025 proposal.

All in all, although there is little new here, it is good to see confirmation of the Commission's ambitions when it comes to the revitalising the European securitisation market.