On October 14, 2014, the EBA published a discussion paper on simple, standard and transparent securitizations, in response to the European Commission’s call for advice in December 2013 on the potential ways and merits of promoting a safe and stable securitization market. The EBA aims to shape a new class of prudentially sound securitization products that may become subject to specific regulatory recognition, and intends to use the three pillars (simplicity, standardization and transparency) as protection measures, to ensure that risks in securitizations unrelated to an underlying exposure are adequately mitigated. The EBA recognizes that a balance between overly lenient treatment of structurally risky transactions and excessively severe treatment of simple, standard and transparent transactions is needed. The EBA proposes to distinguish between “qualifying” securitizations and other securitizations and suggests that “qualifying” securitizations should be defined as meeting both its simple, standard and transparent criteria as well as its credit risk criteria. The EBA intends to provide its final technical advice to the Commission in the second quarter of 2015. The consultation closes on January 14, 2015.
The consultation paper is available at: