Browsing by Subject "term securitisation"

In the wake of the financial crisis, the securitisation markets collapsed and securitisation fell into disrepute in both Europe and the United States. Securitisation was considered to be one of the root causes of the crisis and it subsequently came under intense regulatory scrutiny. By the mid-2010s, however, central banks and industry associations started promoting the revival of the European securitisation market. In September 2015, the European Commission set forth a proposal for a new EU securitisation regulation, with the intention to restart a sustainable European securitisation market. Subsequently, in December 2017, a two-part legislative package on securitisation was adopted following the Commission’s proposal. The first part of the package introduced a new EU securitisation regulation (“Securitisation Regulation”, Regulation (EU) 2017/2402), which established a general framework for all securitisations and a specific framework for simple, transparent and standardised (“STS”) securitisations. The second part of the legislative package, which was adopted as a separate regulation (Regulation (EU) 2017/2401), amended the prudential requirements for banks and investment firms investing in securitisation positions set in the EU Capital Requirements Regulation. This thesis critically examines the general obligations imposed on parties involved in long-term securitisation transactions under the Securitisation Regulation and the novel requirements for simple, transparent and standardised securitisations. The analysis of the Securitisation Regulation’s provisions indicates that both the general obligations and the STS requirements are extremely detailed and prescriptive. Consequently, the Securitisation Regulation has substantially increased the overall regulatory and administrative burden on securitising entities and institutional investors. This study provides evidence that thus far the regulatory reform has not succeeded in its objective of reviving a sustainable European securitisation market. Based on a normative analysis of the Securitisation Regulation’s provisions, this thesis identifies several regulatory obstacles that currently hold back the resurrection of the securitisation market. This thesis concludes that a number of improvements should be made to the current regulatory framework in order to incentivise market participants to issue and invest in securitisations. In light of the historical credit performance of European long-term securitisations, the proposed changes could be implemented without compromising investor protection.