Securitisation and capital requirements [EU Legislation in Progress]

Written by Angelos Delivorias (4th edition),

Updated on 25.1.2018

As part of its ambition to create a Capital Markets Union, the European Commission wants to revive the securitisation market in the EU, in order to offer new financing tools and ease credit provision, especially for small and medium-sized enterprises. Its ‘securitisation initiative’, set out in a proposed regulation on 30 September 2015, would establish a new framework for ‘simple, transparent, and standardised’ (STS) securitisations. This new initiative also has implications for the overall prudential framework for credit institutions and investment firms, therefore the Commission proposed to amend the Capital Requirements Regulation (EU) No 575/2013 accordingly. The proposed amendments would adjust risk retention profiles to reflect properly the specific features of STS securitisations. The most significant changes are: a new hierarchy of risk calculation methods and lower capital requirements for STS. The Council agreed on a general approach on both dossiers in early December 2015. Parliament’s ECON Committee adopted its report a year later, and the two institutions reached agreement on the text in trilogue in June 2017.

Versions

• January 2018: Securitisation and capital requirements (4th edition)
• October 2017: Securitisation and capital requirements (3rd edition)
• July 2016: Securitisation and capital requirements (2nd edition)
• January 2016: Securitisation and capital requirements (1st edition)