| Author (Corporate) | European Commission |
|---|---|
| Series Title | COM |
| Series Details | (2015) 472 final (30.9.15) |
| Publication Date | 30/09/2015 |
| Content Type | Policy-making |
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The development of a simple, transparent and standardised securitisation market constitutes a building block of the Capital Markets Union (CMU) and contributes to the Commission's priority objective to support job creation and a return to sustainable growth. A high-quality framework for EU securitisation can promote integration of EU financial markets, help diversify funding sources and unlock capital, making it easier for credit institutions and lenders to lend to households and businesses. In its Work Programme for 2015, the European Commission set out focused actions with 10 priorities and announced as part of the priority to develop a deeper and fairer Internal Market with a strengthened industrial base that it would put in place an EU framework for simple, transparent and standardised securitisation. In the Investment Plan for Europe presented by the Commission on 26 November 2014, creating a sustainable market for securitisation, without repeating the mistakes made before the crisis, was identified as one of the five areas where short-term action was needed. Securitisation refers to transactions that enable a lender or other originator of assets – typically a credit institution – to refinance a set of loans or assets (e.g. mortgages, auto leases, consumer loans, credit cards) by converting them into securities. The lender or originator organises a portfolio of its loans into different risk categories, tailored to the risk/reward appetite of investors. Returns to investors are generated from the cash flows of the underlying loans. These markets are not aimed at retail investors. This proposal is based on what has been put in place in the EU to address the risks inherent in highly complex, opaque and risky securitisation. Focusing on better differentiation and the development of transparent, simple and standardised securitisation is a natural next step to build a sustainable EU market for securitisation, supporting both EU investment and proper risk management. |
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| Source Link | http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2015:472:FIN |
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| Subject Categories | Business and Industry, Internal Markets |
| Countries / Regions | Europe |
