COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Review of the Securitisation Framework Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation and Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 575/2013 on prudential requirements for credit institutions as regards requirements for securitisation exposures
Date: 2025-06-17
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: bank, credit institution, credit policy, financial instrument, financial requirements, financial risk, financial supervision, financial transaction, insurance company, investment

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   EUROPEAN COMMISSION  Strasbourg, 17.6.2025  SWD(2025) 826 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Review of the Securitisation Framework  Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  amending Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation and      Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 575/2013 on prudential requirements for credit institutions as regards requirements for securitisation exposures   {COM(2025) 825 final} - {COM(2025) 826 final} - {SEC(2025) 825 final} - {SWD(2025) 825 final}  
 
 
Need for action 

Securitisation  pools  financial  assets  held  by  banks  and  financial  institutions,  such  as  loans, 
mortgages, or credit card debt, and packages them into new products that investors can buy. 
Investors  then  receive  regular  payments  as  the  original  debt  is  repaid,  similar  to  receiving 
interest  from  a  loan.  As  a  result,  banks  can  free  up  capital  and  provide  new  loans  to 
households and businesses (i.e. corporates, SMEs), while transferring risk out of the banking 
system. 

During  the  Global  Financial  Crisis,  poor  industry  standards  in  the  US  resulted  in 
securitisations of risky loans, which defaulted and impacted EU investors. As a result, the EU 
adopted  strict  rules  on  securitisation,  which  aimed  to  strengthen  investor  protection, 
transparency, trust,  and the stability  of the securitisation market.  After five years with  these 
rules  in  play,  a  Commission  evaluation  showed  that  there  has  been  an  overcorrection.  The 
securitisation  framework  has  been  designed  too  strictly,  hindering  market  development. 
Although the market has not developed as expected, it has become more secure. Reviving the 
securitisation  market  has  been  identified  as  an  important  initiative  under  the  Savings  and 
Investment Union, which can help increase funding of the European economy.  

The Commission's evaluation has shown that the objectives for the current Framework, set out 
in the 2015 Impact Assessment, remain partially or wholly unmet. The Framework has been 
partially  effective  in  removing  investor  stigma,  and  regulatory  disadvantages  for  simple, 
transparent  and  standardised  securitisations.  However,  it  has  made  it  costly  to  buy  and  sell 
securitised assets and has not made the process of securitisation sufficiently attractive due to 
the high prudential requirements for banks and insurers.  

Today,  securitisation’s  potential  for  risk  diversification,  providing  additional  lending  to  the 
economy  and  capital  market  development  is  underexploited  in  the  EU.  This  represents  a 
missed opportunity for  funding  Europe’s  strategic priorities, meeting the  financing  needs of 
the  green,  digital,  and  social  transitions,  defence  spending,  as  well  as  deepening  European 
capital markets.  In this context, the securitisation review is an important initiative under the 
Savings and Investment Union (SIU). 

What is this initiative expected to achieve?  
This initiative seeks to mitigate the undue barriers to securitisation issuance and investment, 
specifically:  

•  To reduce undue operational costs for issuers and investors, balancing with adequate 

standards of transparency, investor protection and supervision.  

•  To adjust the prudential framework for banks and insurers, to better account for actual 
risks and remove undue prudential costs when issuing and investing in securitisations, 
while at the same time safeguarding financial stability.  

This initiative does not set a specific target for the size or growth of the market, nor does it 
seek  to  favour  certain  sectors  or  incentivise  market  development  in  a  particular  manner. 
Rather,  it  focuses  on  removing  undue  barriers,  resulting  in  a  more  risk-sensitive  and  better 
calibrated “enabling framework” for greater lending to the real economy.  

Besides  regulatory  measures,  other  factors  impact  market  developments.  These  include 
competition from other instruments like covered bonds, as well as monetary policy where in 
the past years easy access to central bank liquidity made it less attractive for banks to issue 

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securitisations.  In  addition,  industry  initiatives  will  be  important  to  lower  costs  through 
standardised issuances and economies of scale. 

Possible solutions 
Policy  options  were  identified  in  three  key  areas,  based  on  input  from  a  broad  range  of 
stakeholders:    the  European  Supervisory  Authorities,  the  Single  Supervisory  Mechanism, 
market  participants,  academics,  NGOs  and  Member  States.  Options  to  (i)  reduce  high 
operational  costs,  (ii)  reduce  undue  prudential  barriers  for  banks  to  issue  and  invest  in 
securitisation,  and  (iii)  remove  undue  prudential  costs  for  insurers  to  invest  in  the  EU 
securitisation  market,  result  in  a  “bundle”  of  preferred  options  which,  taken  together,  could 
best achieve the stated objectives.   

To reduce high operational costs, both a targeted and broader set of measures are considered. 
Option  1.1  involves  simplifying  and  removing  certain  due  diligence  and  transparency 
requirements  that  are  deemed  redundant  or  overly  prescriptive  (e.g.,  streamlining  certain 
verification requirements for repeat transactions and disclosure templates). Under Option 1.2, 
mandatory  securitisation-specific  due  diligence  requirements  would  be  fully  removed  for 
regulated investors, and transparency requirements would become principles-based.  

To  address  the  prudential  framework  for  banks  to  issue  more  and  invest  in  securitisation, 
two  sets  of  options  are  considered:  targeted  changes  (Option  2.1)  and  a  radical  overhaul 
(Option  2.2)  of  the  existing  prudential  framework  for  banks.  Option  2.1  involves  targeted 
adjustments  to  the  Capital  Requirements  Regulation,  to  ensure  the  capital  treatment  of 
securitisation  for  banks  is  more  risk  sensitive,  as  well  as  to  broaden  the  eligibility  of 
securitisations  for  banks’  liquidity  buffers.  Option  2.1  would  also  make  supervisors’ 
assessment  of  transactions’  eligibility  for  capital  relief  under  the  Significant  Risk  Transfer 
Framework faster and more coherent. Option 2.2 would entail a fundamental revision of the 
prudential  framework  for  banks,  including  the  introduction  of  new  formulae  for  calculating 
securitisations’  capital 
the  requirements  for 
treatment,  a  significant  relaxation  of 
securitisations  to  be  eligible  for  inclusion  in  banks’  liquidity  buffers,  and  the  removal  of 
complex requirements for supervisors assessing transactions for capital relief. Unlike Option 
2.1, Option 2.2 would involve material divergences from the international Basel standards.  

To remove disincentives for insurers to invest in the EU securitisation market, three options 
are  presented,  all  of  which  propose  to  reduce  capital  requirements.  Under  Option  3.1,  non-
STS capital requirements would be decreased to reduce the gap with STS capital requirements 
and  remove  the  excessive  level  of  prudence  embedded  in  the  current  framework.  Under 
Option 3.2, capital requirements for senior and non-senior tranches of non-STS securitisations 
would be differentiated, thereby removing the prudential disincentives to invest in this market 
segment. Option 3.3 reduces capital requirements for all securitisations (STS and non-STS), 
ensuring that capital requirements focus on default risk factors only.  

Impacts of the preferred options 
Based  on  the  comparison  of  effectiveness,  efficiency,  and  coherence,  the  detailed  analysis 
selected options 1.1, 2.1, and 3.2 as the preferred bundle. 

In addressing high operational costs for issuers and investors, the radical changes to the non-
prudential  framework  under  Option  1.2  would  yield  higher  benefits  with  regard  to  burden 
reduction, however, this would be accompanied by greater risk to market integrity. Option 1.1 
presents  a  more  balanced  outcome  between  reducing  undue  operational  due  diligence  and 
disclosure  costs,  while  maintaining  high  levels  of  market  transparency,  investor  protection 

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and  supervisory  oversight.  Overall,  the  changes  proposed  to  the  due  diligence  and 
transparency requirements are estimated to result in EUR 310 million of cost savings per year 
for the EU securitisation market. 

Regarding  the  prudential  rules  for  banks,  Option  2.1  is  the  preferred  option  to  address 
miscalibrations  in  an  efficient  and  targeted  way.  Option  2.2  could  lead  to  riskier  capital 
positions and impact banks’ liquidity buffers, Option 2.1 would stimulate banks’ participation 
in the securitisation market without jeopardising financial stability or deviating significantly 
from international standards.  

Option  3.2  appears  to  be  the  most  effective  in  removing  undue  prudential  disincentives  for 
insurers to participate in the securitisation market. It would remove undue prudential obstacles 
to  investments  in  non-STS  securitisations  by  addressing  the  current,  excessively  stringent, 
prudential  treatment,  while  removing  undue  incentives  for  insurers  to  invest  in  the  riskiest 
tranches and avoiding undue deterioration of policyholder protection. Capital relief stemming 
from Option 3.2 would be close to EUR 6 billion (vs. EUR 4 bn for Option 3.1 and EUR 7 bn 
for Option 3.3). 

The  preferred  bundle  presents  an  opportunity  for  the  EU  to  reduce  burden  and  compliance 
costs  for  issuers  and  investors,  to  revitalise  the  securitisation  market  and  enhance  the 
competitiveness  of  the  EU  financial  system.  Financial  institutions  across  the  EU  will  face 
more straightforward transparency and due diligence regimes and greater risk-sensitivity with 
regards to the actual risk of the securitisation investment.  

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