Article summary
The European Systemic Risk Board (ESRB) has published its first report on the implications of the EU securitisation market for financial stability, focusing on residential mortgage-backed securities (RMBS). The report shows that the EU securitisation market is small compared with that of the US and that it has shrunk since the 2008 financial crisis. It also finds that the market is concentrated in a few Member States and banks are the main holders of securitisations. The ESRB says most tranches of EU securitisations are rated as investment grade, although the impact of the coronavirus (COVID-19) pandemic and its aftermath on the securitisation market remains to be seen.
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