Finance Watch response to the European Commission consultation on an EU framework for simple, transparent and standardised securitisation.
Related policy area
Deregulation of equity, bonds and derivatives markets has undermined the primary objective of financial markets: to channel savings and capital to the most promising economic developments, while managing risk adequately.
It is essential that the future definition of qualifying securitisation integrate lessons from the crisis; among other things securitisation should exclude tranching from the framework in order to be truly simple.
We regret that the qualifying framework relies on external ratings, in contradiction of the Commission’s objective to reduce the reliance on external credit assessment.
We welcome the exclusion of synthetic securitisations from the framework.
We believe that risk retention requirements should be increased for both qualifying and non-qualifying securitisation to a vertical slice of 15%.
We hope that the Commission will take into account the opinion of non-industry stakeholders in its future framework.
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