MNI BRIEF: EC Proposes Cuts In Securitisation Capital Costs

The European Commission has issued proposals to cut capital costs and simplify regulation of securitisations in a bid to revive the market, a key plank of the EU's plan for a Savings and Investments Union. 

The changes aim to reduce high operational and capital costs for issuers and investors in securitisations and simplify due diligence and transparency requirements. 

Brussels also proposes amending the Capital Requirements Regulation to inject more "risk sensitivity" into prudential regulations on banks which are issuing securitisations, looking also to change the Liquidity Coverage Ratio to better facilitate the inclusion of securitisations as liquid short-term assets on bank balance sheets.