It is also odd that proposals for insurer securitisation capital requirements would require far more capital than if an insurer held the underlying asset pool directly. These are level-playing field issues that are specific to the EU and, in my view, should be kept in mind when reflecting on the EU-specific securitisation framework.
1 This cross-subsidization may now become more difficult if interest rates remain low for a long period of time; the difference between market rates and the rate paid to transaction accounts must be narrow if market rates are close to zero, implying that attracting deposits by offering free payment services would no longer be a profitable strategy.