That challenge highlights the limits of Europe’s current financial structure. Europe remains more dependent on bank balance sheets than the US. In the US, deeper capital markets, broader institutional participation, and a more developed securitisation ecosystem allow lending capacity to be recycled more efficiently. Europe’s bank-based model has its strengths, but on its own, it is not enough to fund innovation, infrastructure, energy security, defence, and competitiveness at the pace the moment demands.
The central question facing the market is whether Europe is prepared to treat securitisation not as a niche funding tool, but as a larger part of the region’s financing architecture. Securitisation is not a silver bullet for Europe’s growth challenge, but it will remain an underdeveloped financing channel unless policy allows it to play a larger role. It can move loans into the capital markets, release capacity for originators, and create room for new lending. It can support mortgages, auto loans, consumer credit, SME finance, infrastructure, corporate lending, and other real-economy assets.
Europe’s banks will remain central to the financing system, particularly in relationship lending and origination. A stronger securitisation market would extend the reach of bank origination by giving institutional capital more efficient ways to support lending capacity. That requires a framework designed to enable broader institutional participation. A key constraint has been the limited role insurers have been able to play. The Solvency II recalibration due to apply from January 2027 is a meaningful step in the right direction, but it will not by itself create the depth of long-term investor participation Europe needs. That will require broader conditions in which insurers and other long-term investors can participate more efficiently in well-understood securitisation markets.
The same is true of the framework for Simple, Transparent and Standardised (STS) securitisations. It works well for parts of the market, but it cannot carry the full weight of Europe’s securitisation revival if too many assets sit outside its scope. A broader market will need a framework that better reflects the range of assets that finance the real economy, while preserving the discipline and comparability that STS was designed to provide.
Recent issuance shows momentum, even if longer-term volumes remain below Europe’s potential. CLOs continue to anchor placed activity, while RMBS, auto ABS, CMBS, and synthetic securitisations remain important parts of the market. That breadth of activity matters because it shows that securitisation is already functioning across asset classes and funding channels. The next step is to move beyond recognising securitisation’s potential and start using it more fully to finance the growth, resilience, and competitiveness Europe wants.
KBRA will publish daily recaps of the three-day gathering on kbra.com, with coverage also appearing in GlobalCapital.