The “Securitisation regulation”: Missing the Target? College of Europe Policy Brief #16.16, October 2016

Commain, Sébastien (2016) The “Securitisation regulation”: Missing the Target? College of Europe Policy Brief #16.16, October 2016. [Policy Paper]

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Abstract

Executive Summary > With its proposal for an EU regulation on securitisation, the European Commission tries to strike a balance between the funding opportunities that this financial practice could bring and the specific risks that it entails. > The proposed regulation would introduce a differentiated, advantageous, prudential treatment for securitisations that are “simple, transparent and standardised”. In this way, it tries to deal with some of the most pressing issues identified with securitisation during the Global Financial Crisis in 2008. > However, the proposed regulation still presents shortcomings and uncertainties, leaving doubts as to its capacity to boost investments and avoid risky practices. > While aiming at re-orienting financing towards SMEs, employment and growth, the proposed framework is unlikely to actually bring significantly higher funding to firms, and could fuel real-estate bubbles.

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