Securitisation


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Securisation

AFME advocates securitisation as a vital funding tool in Europe and a channel for borrowers to access the capital markets.

Overview

Securitisation has traditionally contributed to funding real economy assets such as residential mortgages, auto loans and SME lending and other assets. At a time when businesses and households across the EU are experiencing difficulties in accessing finance, securitisation can improve the availability of credit, by allowing banks to free up their balance sheets for further lending. A recovery in the securitisation market should play an important role in unlocking credit markets and supporting a wider economic recovery across Europe.

The European securitisation market has been significantly affected by the financial crisis and current macroeconomic volatility. Annual placed issuance levels have dropped from the €450 billion of pre-crisis years (2006-2007) to €108 billion as at the end of 2019. Moreover, investment in the market has stalled due to uncertainty and negative signaling surrounding the new set of regulatory measures. The Simple Transparent and Standardised (STS) framework for securitisation which was introduced to help the recovery of the securitisation marker has not been fully finalised and thus has not fulfilled its ambition.

AFME is committed to reviving the securitisation market in Europe and is engaging with the regulators and policy makers on variety of important subjects such us capital and liquidity rules, transparency and due diligence, risk retention as well as development of green securitisation.
Securitisation as an essential tool for Europe's economy
Europe's economy today faces to main challenges. Firstly, repairing the damage to the economic fabric and growth prospects caused by the pandemic. Secondly, the green transition and achieving the targets which will require enormous capital mobilisations. 

Securitisation is uniquely placed to address these challenges through its ability to transfer risk while still enabling banks to continue to lend.

Contacts

Richard Hopkin

Managing Director, Head of Fixed Income