4 Amendments of Notis MARIAS related to 2015/0225(COD)
Amendment 49 #
Proposal for a regulation
Recital 1
Recital 1
(1) Securitisations are an important constituent part of well-functioning financial markets insofar as they contribute to diversifying institutions' funding sources and releasing regulatory capital which can then be reallocated to support further lending and to guarantee the liquidity level of the lender. Furthermore, securitisations provide institutions and other market participants with additional investment opportunities, thus allowing portfolio diversification and facilitating the flow of funding to businesses and individuals both within Member States and on a cross- border basis throughout the Union. These benefits, however, should be weighed against their potential costs. As seen during the first phase of financial crisis starting in the summer of 2007, unsound practices in securitisation markets resulted in significant threats to the integrity of the financial system, namely due to excessive leverage, opaque and complex structures that made pricing problematic, mechanistic reliance on external ratings or misalignment between the interests of investors and originators ("agency risks").
Amendment 51 #
Proposal for a regulation
Recital 2
Recital 2
(2) In recent years, securitisation issuance volumes in the Union have remained below their pre-crisis peak for a number of reasons, among them the stigma generally associated with these transactions. The recovery of securitisation markets should be based on sound and prudent market practices and should contribute to job creation to prevent a recurrence of the set of circumstances that triggered the financial crisis. To that end, Regulation [Securitisation Regulation] lays down the substantive elements of an overarching securitisation framework, with ad-hoc criteria to identify simple, transparent and standardised (“STS”) securitisations and a system of supervision to monitor the correct application of these criteria by originators, sponsors, issuers and institutional investors. Furthermore, Regulation [Securitisation Regulation] provides for a set of common requirements on risk retention, due diligence and disclosure for all financial services sectors.
Amendment 54 #
Proposal for a regulation
Recital 3
Recital 3
(3) Consistent with the objectives of Regulation [Securitisation Regulation], the regulatory capital requirements laid down in Regulation (EU) No 575/2013 for institutions originating, sponsoring or investing in securitisations should be amended to reflect adequately the specific features of STS securitisations and address the shortcomings of the framework which became apparent during the financial crisis, namely its mechanistic reliance on external ratings, excessively low risk weights for highly-rated securitisation tranches and, conversely, excessively high risk weights for low-rated tranches, and insufficient risk sensitivity, owing to the lack of adequate risk factors in the approaches to defining the risk weights. On 11 December 2014 the Basel Committee for Banking Supervision ("BCBS") published its “Revisions to the securitisation framework” (the “Revised Basel Framework”) setting out various changes to the regulatory capital standards for securitisations to address specifically those shortcomings. The amendments to Regulation (EU) No 575/2013 should take into account the provisions of the Revised Basel Framework.
Amendment 60 #
Proposal for a regulation
Recital 4
Recital 4
(4) Capital requirements for positions in a securitisation under Regulation (EU) No 575/2013 should be subject to the same calculation methods for all institutions. In the first instance and to remove any form of mechanistic reliance on external ratings, an institution should use its own calculation of regulatory capital requirements where the institution has permission to use the Internal Ratings Based approach (the "IRB") in relation to exposures of the same type as those underlying the securitisation and is able to calculate regulatory capital requirements in relation to the underlying exposures as if these had not been securitised ("Kirb"), in each case subject to certain pre-defined inputs (the "SEC-IRBA"). A Securitisation External Ratings-Based Approach (the "SEC-ERBA") should then be available to institutions that may not use the SEC- IRBA in relation to their positions in a given securitisation. Under the SEC- ERBA, capital requirements should be assigned to securitisation tranches on the basis of their external rating. When the first two approaches are not available or the use of the SEC-ERBA would result in incommensurate regulatory capital requirements relative to the credit risk embedded in the underlying exposures, institutions should be able to apply the Securitisation Standardised Approach (the "SEC-SA"), with a view to giving a fresh boost to securitisation markets, which should rely on a supervisory-provided formula using as an input the capital requirements that would be calculated under the Standardised Approach to credit risk (the "SA") in relation to the underlying exposures if these had not been securitised (“Ksa”).