Investors, originators issuers and other market participants represented by the above signatories are committed to supporting a safe and sustainable securitisation market that serves the real economy in Europe.

Despite the strong performance of European securitisation through and since the financial crisis, the market has suffered in recent years. The association of the securitisation technique with the excesses and bad behaviour seen in the US sub-prime mortgage market has led to high capital charges and harsh treatment under liquidity rules – with regulatory costs for holding securitisation paper several times higher than other similarly-rated products. As a result, new issuance levels continue to be low and participants are leaving the market.

We believe the current European debate represents a unique opportunity for the rehabilitation of securitisation on the basis of an optimal framework that benefits the economy and incorporates lessons from the financial crisis.

Policymakers and the general public are justified to raise questions about the risks and benefits of seeking a revival of securitisation in Europe. In this paper we address topics that have been raised since the publication of the European Commission’s proposals on securitisation as part of the Capital Markets Union. We hope that this contribution can help to make a positive case for the rehabilitation of securitisation to the benefit of Europe’s businesses, borrowers and consumers.