14 May 2021

ECB Banking Supervision to supervise securitisation requirements for banks

ECB supervisors to look at requirements related to risk retention, transparency and ban on resecuritisation for significant banks; ECB to operationalise these supervisory tasks over coming months

The European Central Bank (ECB) today announced its decision to start ensuring that the banks it directly supervises comply with the requirements for risk retention, transparency and resecuritisation, which are set out under Articles 6 to 8 of the EU Securitisation Regulation^[1].

The decision follows recent clarifications in the amendments to the Regulation, which are part of the EU’s Capital Market Recovery Package. The amendments explicitly state that risk retention, transparency and ban on resecuritisation requirements are of a prudential nature and, therefore, should be supervised by the competent prudential supervision authorities. Consequently, the supervision of risk retention, transparency and ban on resecuritisation requirements is an ECB competence. The decision further clarifies the implementation of the regulatory framework, which is an important precondition for a well-functioning securitisation market.

Over the coming months, the ECB will define how exactly it intends to perform these supervisory tasks. It will then communicate further details on its supervisory approach and model, including obligations for banks to notify their supervisor of securitisation-related activities.

ECB

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