Europe is giving securitisation a second chance – but where does London fit in?
Somewhat ironically given its role in the global financial crisis, the US capital market has been showing signs of recovery of late while its European counterpart continues to be subdued. And that’s something the European Commission won’t stand for.
Recognising the need for a shot in the securitisation arm, the Commission began to talk of a Capital Markets Union (CMU) back in 2015, putting the first pieces into action almost a year ago with a package setting out criteria for simple, transparent and standardised securitisation (STS). That deal is one of the cornerstones of the CMU, the Juncker Commission’s pivotal project to build a single market for capital in the EU, unlocking up to EUR 150 billion of additional funding to the real economy.
There’s one problem, though: the heart of Europe’s capital markets lies in London, a city that soon will no longer be part of the union – of Europe, or of its capital markets – thanks to Brexit.