The ABS loan-level initiative has made an important contribution in ensuring a high degree of transparency to enable investors to assess the embedded risks of securitisations. Obviously, ABS had to become safer after the experience of the Great Financial Crisis, in particular with securitized US-subprime mortgages. Regulators and legislators have acted accordingly, and the work has not yet been completed.
But we should not throw the baby out with the bath water. Instead, the potential of healthy securitizations should be exploited. In line with the Commission goal to revive the securitisation market in Europe, in order to broaden investment opportunities for investors and boost lending to households and businesses a number of barriers need yet to be overcome.