On the left of the European hemicycle, two divergent tendencies are making themselves heard after the European Parliament’s Committee on Economic and Monetary Affairs (ECON) approved, despite 25 votes against, the draft reports by Ralf Seekatz (EPP, German) on the reform of the European securitisation framework (see EUROPE 13862/3).
The Social Democrats’ shadow rapporteur, Eero Heinäluoma (S&D, Finnish), sees it as a legislative package that meets the needs of businesses on the one hand, and preserves financial stability on the other.
“We supported the package, as we consider it overall balanced”, Mr Heinäluoma told Agence Europe on Wednesday, but he nevertheless considered it “key” that the prudential framework surrounding securitisation be “properly calibrated”.
As far as the securitisation regulation is concerned, the European Social Democrats believe that “a balanced text around public versus private securitisation, as well as around EU supervision, sanctions, and strict safeguards around unfunded credit protection, are a step forward”, stressed the MEP on behalf of his group.
Conversely, for the Greens/EFA group, the legislative package - which still has to be approved at the European Parliament plenary session - is completely off the mark. “Last night’s vote in committee was a defeat for Europe’s citizens and a victory for the big banks. The securitisation reform proposed by rapporteur Seekatz has obtained a majority thanks to the far right, the liberals of Renew [Europe, editor’s note], and with the connivance of the Socialists”, denounced the French Green MEP Marie Toussaint on Wednesday evening.
“This text offers the banks exactly what they asked for by massively reducing prudential requirements”,she declared.
And she added that: “Securitisation is precisely the mechanism that triggered the 2008 financial crisis. Fifteen years on, we have learned nothing: we are in the process of recreating the conditions that led to the collapse of the financial system”.
The Investment Company Institute (ICI) stated that these reforms are insufficient, and is counting on interinstitutional negotiations (trilogues) to “remove the remaining obstacles”. On Tuesday, the powerful lobby group representing asset managers called on MEPs and EU Member States to go further in reforming the European securitisation framework.
In a press release published on Tuesday evening, the organisation said that the adjustments made so far by the co-legislators (see EUROPE 13777/24) are still insufficient to revive a European market that is considered to have been sluggish since the 2008 financial crisis.
The ICI welcomed some of the greater flexibility, particularly with regard to transparency requirements and the investment possibilities for UCITS funds, but argued that the due diligence rules and sanctions regime are still too cumbersome.
The organisation advocates a more institutional investor-friendly approach to facilitate the movement of capital within the EU and support the objectives of the ‘Savings and Investment Union’.
“Trilogues can deliver targeted improvements that address remaining barriers and provide greater legal certainty for investors”, said ICI Director of Global Affairs Tracey Wingate. (Original version in French by Bernard Denuit)