Standardised data on individual assets could be stored on a centralised platform at European level, which would combine exposures from multiple banks and vouch for quality of the data. This would allow investors to carry out a due diligence at low cost. Bespoke portfolios could be constructed in line with the mandates and objectives of individual investors. Securitisation could complement outright NPL sales.
One of its advantages is that the universe of distressed debt investors can be expanded. Thanks to the ratings given to senior tranches, a broader group of investors could acquire NPLs. Additionally, securitisation offers another way through which governments may jump-start the NPL market, for example by co-investing, together with private investors, in junior or mezzanine tranches.