The European Union is set to revive the financial practice of securitization, a key component in the 2008 crisis, as part of its efforts to stimulate bank lending. The European Commission will publish legislation aimed at reviving the industry, which has been largely dormant since post-crisis regulations were introduced.
Securitization involves banks re packaging and reselling debt. This practice allows banks to transfer assets off their balance sheets, freeing up space for new loans. In 2008, securitization played a significant role in exacerbating the financial crisis. Now, EU officials are seeking to harness its benefits for economic growth by encouraging banks to use it again.
Source: https://www.politico.eu/article/european-union-securitization-banking-debt-2008-financial-crisis