However, the signatories stress that for STS securitisation to be successful, and for the wider securitisation market to recover, it is critical that other pieces of EU legislation are calibrated appropriately to create the right conditions and incentives to support and encourage securitisation. Important calibrations for securitisation investments in Solvency 2 and the Liquidity Coverage Ratio (LCR) do not go far enough in addressing the harsh treatment of securitisation. The associations are concerned that without a more ambitious approach that fully recognises the prudential strength of securitisation in Europe, especially STS securitisations, the new Common Framework and STS Framework may become a missed opportunity.
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