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While the European securitisation market experienced constant growth for almost a decade prior to the financial crisis, it then plunged precipitously and has never fully recovered. Since 2009, in an effort to revive securitisation and channel funds to the real economy, European authorities have introduced a considerable amount of new regulations/legislation, for example, in the areas of banking (CRD II, CRD III and CRDIV) insurance (Solvency II) asset management (AIFMD, UCITS, MMFs), and credit rating agencies (CRA).
These measures, however, have not achieved the expected results in terms of reviving the market and this commentary therefore argues that more needs to be done. In concrete terms, it calls upon Europe to:
i) issue securitisation products with transparent and easy-to-understand structures,
ii) streamline and consolidate EU financial services legislation and
iii) devise smart ways of making cross-border investments easier.