The European Supervisory Authorities (ESAs) - EBA, ESMA and EIOPA - have proposed targeted changes to the capital framework for banks in their joint advice to the European Commission on the review of the prudential framework for securitisation, published on Monday 12 December.
In October, the Commission found that the European securitisation framework was working well (see EUROPE 13042/25) and invited the ESAs to review the technical standards for transparency requirements.
The ESAs “welcome the current review as an opportunity to assess the performance of the current framework and support the objective of reviving the EU securitisation market”. Their targeted proposals aim to improve the consistency and risk sensitivity of the capital framework for banks.
However, they advised that the liquidity framework for banks and the prudential framework for insurers and reinsurers should be maintained as they are now. They considered that changing the prudential framework for securitisation would not, on its own, ensure the revival of the securitisation market.
The ESAs have therefore recommended some quick technical solutions to improve the consistency and clarity of the capital framework for banks. They hope to support the further growth of the significant risk transfer market in a prudent manner, promoting the issuance of resilient securitisations without jeopardising financial stability.
As regards the insurance sector, the authorities concluded that the Solvency II framework did not appear to influence the insurance business in the EU securitisation.
The ESAs therefore stressed that further analytical work should be carried out in order to gain a comprehensive understanding of the relevant factors influencing the securitisation market, some of which fall outside the prudential framework.
To consult the opinion of the ESAs: https://aeur.eu/f/4md (Original version in French by Anne Damiani)