Qualifying Securitisation | What Is It And What Does It Mean For The Market?

In September 2015 the EU Commission is expected to bring forward a legislative proposal in on 'high-quality' securitisation as part of the Capital Markets Union. The Commission suggests it may be possible to incentivise the issuance of high quality securitisation through a differentiated capital charge relative to standard securitisation. This in turn could re-invigorate the European securitisation market.

Securitisation potentially brings real market benefits, such as being able to match the maturity of assets to liabilities, and deepening and diversifying sources of finance. A robust, well-functioning securitisation market would bring stable market-based funding, to complement bank lending as a source of finance for the economy. This could benefit under-financed SME markets and generate long-term sustainable financing for mortgage portfolios.