Securitisation is critical for expanding access to funding and diversifying Europe’s financial system. Currently, Europe relies heavily on bank financing (90% vs. 25% in the U.S.), which increases risk during market or sector disruptions. Securitisation transfers risk from banks to global investors, fostering financial stability and boosting funding across the real economy.
Challenges
- Europe’s securitisation market has shrunk to 17% of the size of the U.S. market (from 85% pre-GFC).
- Transparency and due diligence requirements in the EU are overly complex and costly, discouraging European issuance and investor demand.
- EU regulations limit investors to only 25% of the global securitisation market, restricting competitiveness.
EU securitisations have languished in the context of those in the U.S. and EU covered bond issuance (€bn)
Benefits
- For Borrowers: Increased access to credit for mortgages, consumer loans, businesses, infrastructure, and renewable energy projects.
- For Investors: Broader portfolio diversification by accessing non-corporate credit and resilient returns.
- For Financial Stability: Improved transparency, risk transfers away from banks, and dynamic price discovery in credit markets.
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Supporting documents
Click link to download and view these filesReviving European Securitisation
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