Today, the Joint Committee of the European Supervisory Authorities (EBA, ESMA and EIOPA) issued their long-awaited report on the regulation of European securitisation. This report was mandated in the 2017 Securitisation Regulation and was supposed to provide a “tour d’horizon” of how the regulation was functioning and whether it was achieving its stated objective of reviving a safe and sound securitisation market.
An initial review of the report would suggest that it appears to be a significant missed opportunity to address the shortcomings of the current regulatory framework and consequent failure to revive the market, and that it has not drawn the firm conclusions needed. Retreating behind the narrow mandate provided by the regulation, the ESAs have chosen not to address the recommendations of the independent High Level Forum on the Capital Markets Union set up by the Commission and endorsed by almost all market participants (including PCS) and have instead opted to call for yet more investigations of the key recommended prudential changes.
PCS hopes to bring a more thorough analysis of this report in a forthcoming Newsletter, but it is unlikely that its conclusions will change our view that this report is a major disappointment.