|Author (Corporate)||European Commission: DG Financial Stability Financial Services and Capital Markets Union|
|Series Details||COM (2020) 283|
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).
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).
|Subject Categories||Business and Industry, Economic and Financial Affairs|
|Subject Tags||Capital Markets Union [CMU], Financial Services|
|Keywords||Banks | Banking, COVID-19 (Coronavirus)
|International Organisations||European Union [EU]|