The European Union is proposing changes to its securitisation rules, a move aimed at increasing transparency and reducing risks in the financial sector. These reforms have been long debated due to concerns over their potential impact on lending and borrowing practices.
The proposed overhaul seeks to improve standards for the treatment of assets sold as collateral during securitisation processes. The EU aims to enhance regulatory oversight and ensure that lenders are held accountable for any losses resulting from these transactions.
Key aspects of the reform include:
– Stricter controls on asset valuation
– Improved disclosure requirements for investors
– Enhanced monitoring and enforcement mechanisms
The proposed changes have been met with varying degrees of support, with some arguing that they will stifle lending growth while others see them as a necessary step to restore confidence in the financial system.
As the proposal moves forward, its potential impact on the global economy and financial markets remains uncertain.
Source: https://www.ft.com/content/8096dbf2-f91c-45cc-b546-d3b46d523778