Proposal for an EU Framework for Simple, Transparent and Standardised Securitisation

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.

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