Cash securitization 'top' of EBA agenda
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Cash securitization 'top' of EBA agenda

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Global ABS regulation panel 'most positive for 15 years'

There was a buzz in the air as the delegates filed out of the Track A panel on Economic and Regulatory Drivers of Securitisation on Wednesday afternoon at Afme and Invisso’s Global ABS 2024 conference.

Understandably so, given that after years of making the same arguments, attendees had just heard that, finally, they are the priority.

“Promoting the development of [cash securitization] is at the top of our agenda and also the core legislature,” Roberta De Filippis, team leader for securitisation and covered bonds at the EBA, told the conference.

“It’s more positive than it’s been in 15 years,” one delegate said. “Fifteen years ago, they were shooting at us. If this doesn’t bring change, I don’t know what will.”

From the first moment, the panel was alive with optimism, with PCS chief executive Ian Bell setting the stage.

“The difference is the setting in which our arguments are being deployed,” Bell said. “In a world of big blocks, you’re either a block or a vassal of a block.”

CMU vital for securitization’s 'survival'

Bell argued that Europe needs to revitalise securitization to compete with other powers.

“The CMU [Capital Markets Union] is part of a survival strategy,” he said.

There have been some successes, with synthetic securitization growing into a crucial tool for banks’ capital management programmes. Although covered bonds are still preferred for funding within the EU, even when cash securitization could serve both funding and capital management purposes.

Indeed, a recent wave of deals illustrated that possibility.

“The introduction in 2019 of the ‘STS’ label has not produced the results we were hoping for,” said De Filippis about the cash market. “Maintaining an open dialogue with the industry is really important. We are committed to allowing securitization to play a role in the CMU.”

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