- On 17 June, the European Commission published a legislative package on the review of the EU securitisation framework.
- The objective of the proposed measures is to strengthen EU capital markets and improve the availability of financing by facilitating the securitisation of bank assets into products that investors can buy.
- Finance Finland’s initial view of the proposal is positive. The measures have the potential to revive the EU securitisation market.
On 17 June 2025, the European Commission published a legislative initiative on the review of the EU securitisation framework. The objective of the proposed measures is to channel more investments into the real economy by facilitating the pooling and packaging of loans and debt held by banks into products that investors can buy. The proposal includes targeted amendments to several regulations, which enable new investment opportunities. It will also result in capital relief which banks can use for additional lending to EU households and businesses.
“Our initial view of the proposal is positive. Of course, such an extensive legislative package will require closer examination. It is possible that the measures could revive the European securitisation market if they are implemented. The amendments to capital requirements would significantly improve the risk sensitivity of regulation, which is crucial in the low-risk environment of the Nordics”, comments Finance Finland’s Head of Banking Regulation Olli Salmi.
The great financial crisis was a turning point
The great financial crisis damaged the reputation of securitisation, and to restore public trust, the EU imposed certain restrictions. Despite the good aims, the new regulation turned out to be partly too restrictive. Salmi says the restrictions on securitisation have significantly reduced banks’ possibilities and willingness to securitise assets held in their balance sheets.
“With the new proposal, the Commission is aiming to ease the strict limits while retaining those parts of regulation that prevent the emergence of uncontrolled risks in the economy”, Salmi summarises.
The proposal would simplify banks’ requirements in situations where all parties are aware of the risks. The draft amendments also enable the broader inclusion of high-quality securities in investors’ liquidity buffers. Certain due diligence requirements of investing will be simplified in situations where other risk mitigation measures are already in effect.
“The proposal also includes amendments aimed at reducing reporting requirements, which are highly welcome changes”, Salmi says.
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