Publications

Securitisation markets have proved remarkably resilient since the Eurozone crisis re-ignited in the summer of 2011. Many financial institutions have found securitisation a key funding tool in markets where concern among investors about the possible failure of European banks amidst a sovereign crisis adversely impacted unsecured debt and covered bonds as funding sources. In many ways this countercyclical aspect of securitisation issuance is not surprising as it is widely acknowledged that European ABS product has performed well from a credit perspective throughout the financial crisis and that European consumers remain resilient in paying their debts in the face of austerity. Encouragingly during periods when the concern about the Eurozone has subsided, ABS issuance has remained strong indicating a level of pro-cyclicality for securitisation alongside the counter-cyclical strength already mentioned. The impact of regulation remains the major concern facing the re-establishment of deep and properly functioning securitisation markets.

In this latest publication in our series we explore how regulatory developments on both sides of the Atlantic could adversely affect securitisation. We also consider how the evolving rules of the Eurosystem are impacting how securitisation instruments can be used to obtain funding from the European Central Bank. New developments in areas including whole business deals, CLOs and structured finance swaps are also considered. There is also an article discussing how new forms of finance, including securitisation, can help provide support for the real economy. A recognised role for securitisation in underpinning growth can only help show regulators and politicians alike the importance of properly functioning securitisation markets.

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