Market welcomes EBA advice on securitisation

Author: Lizzie Meager | Published: 8 Jul 2015

Market participants have praised the EBA’s recently issued advice on securitisation for its progressive and comprehensive approach. But with overall European volumes of the asset class at 35% of their pre-crisis levels, lawyers are unsure whether the proposed amendments will give the market the revival it needs.

The full report on Simple, Standard and Transparent (SST) securitisation was published yesterday, though its key points were outlined at a public hearing on June 25.

"This is a very encouraging and significant step forward," said Richard Hopkin, head of fixed income at the Association for Financial Markets in Europe (Afme). "It’s great that securitisation is now being seen as part of the solution and not part of the problem."

The report proposes a reduction of risk weight floors by 25% for bank investors, which would take it to 10% for one year and 10% for five years.

Another suggestion welcomed...