With the ultimate goal of reviving the securitisation market and thus improving the financing of the EU economy, the EU Commission published a draft Regulation on Securitisation on the 30th September, 2015. The proposal sets out a general framework for securitisation and amendments to the Capital Requirements Regulation (CRR) and aims to:
- restart markets on a more sustainable basis, so transparent and standardised securitisation can be an effective funding;
- allow for efficient and effective risk transfers to a broad set of institutional investors as well as banks;
- allow securitisation to function as an effective funding mechanism for longer term investors as well as banks; and
- protect investors and manage systemic risk by avoiding a recurrence of the flawed “originate to distribute” models.