Handle with care – How Europe can reap the benefits of securitisation
- Provided it is sufficiently regulated, securitisation can help to fund the economy and share risks within the monetary union. Securitisation combines the advantages of banks in lending and of financial markets in financing. However, a lack of standardisation and legal harmonisation currently prevents the EU from reaping the benefits of this instrument. Weakening the prudential framework will not create a truly European market but may pose new risks to financial stability. Instead, this Policy Brief argues that to scale up securitisation, overcoming the fragmentation in national contract and insolvency laws in the longer term will be key. In the meantime, the European Commission should cut unnecessary red tape and establish an EU-wide standardised securitisation product tailored to an asset class that shows sustainable growth potential. Renovation loans are a promising option.
Document Type: | Working Paper |
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Language: | English |
Author(s): | Sebastian Mack |
Publication year: | 2024 |
Publishing Institution: | Hertie School |
Number pages: | 11 |
Related URL: | https://www.delorscentre.eu/en/publications/detail/publication/handle-with-care-securitisation |
Release Date: | 2024/03/25 |
Hertie School Research: | Jacques Delors Centre |
Jacques Delors Centre / Policy Briefs | |
Licence of document (German): |