Proposal for a Regulation amending Regulation (EU) No 575/2013 as regards adjustments to the securitisation framework to support the economic recovery in response to the COVID-19 pandemic

Author (Corporate)
Series Details COM (2020) 283
Publication Date 24/07/2020
Content Type

Summary:

Legislative initiative tabled by the European Commission on 24 July 2020, introducing a number of amendments to Regulation (EU) 575/2013 on prudential requirements for credit institutions and investment firms, known as the Capital Requirements Regulation (CRR).

Further information:

Regulation (EU) 575/2013 aims to strengthen the prudential requirements of banks, requiring them to keep sufficient capital reserves and liquidity. The overall objective is to make banks more robust and resilient in periods of economic stress. Securitisation is a tool through which banks can bundle loans, turn them into securities, and sell them onto capital markets. It can play an important role in enhancing the capacity of institutions to support the post-pandemic economic recovery, providing for an effective tool for funding and risk diversification for institutions.

This proposal aims to enhance that potential by introduced a number of targeted amendments. It includes the provision for a more risk-sensitive treatment for simple, transparent and standardised (STS) on-balance-sheet securitisation, as well as the removal of existing regulatory constraints to the securitisation of non-performing exposures (NPEs) embedded in the framework.

The draft law was adopted by the Commission as part of the so-called EU Capital Markets Recovery Package. It builds on reporting undertaken by the European Banking Authority (EBA).

Source Link https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2020:283:FIN
Related Link(s)
Official
EUR-Lex: SWD(2020)281: Staff Working Document accompanying the Proposal https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2020:120:FIN
European Commission: Publications: Coronavirus response: How the Capital Markets Union can support Europe’s recovery https://ec.europa.eu/info/publications/200722-proposal-capital-markets-recovery_en
European Commission: Press Release, 24/07/2020: Coronavirus response: Making capital markets work for Europe's recovery https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1382
European Commission: Coronavirus response: How the Capital Markets Union can support Europe's recovery (24 July 2020) https://ec.europa.eu/commission/presscorner/detail/en/qanda_20_1377

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