The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Securitization regulation: EU takes a hammer to ABS

Investors worry that proposed regulation will punish the European market for weaknesses in US sub-prime origination.

Alexander Batchvarov, Merrill Lynch

"If this goes ahead and it does not kill securitization then it will just make it very costly. That cost will be transferred to borrowers and result in lower GDP growth"
Alexander Batchvarov, Merrill Lynch

The strained relations between Europe’s securitization industry and its regulator hit a new low in July with the European Commission’s announcement of its latest plans to address the perceived failings of the market. The EC had earlier announced that as part of its proposed changes to the European Capital Requirements Directive (CRD) any originator of a securitization would be required to retain 15% of its risk-weighted assets on its balance sheet. Not surprisingly, this went down like a lead balloon with the market. "They are taking a hammer to kill a cockroach," complained Robert Plehn, head of securitization and covered bonds at HBOS, at the Global ABS conference in June. "It is completely arbitrary. On the one hand they want you to keep assets and on the other hand they want you to sell them to get capital relief."

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree