ECB to Supervise Securitization Requirements for Banks
ECB announced the decision to start ensuring that the banks it directly supervises comply with the requirements for risk retention, transparency, and resecuritization, under the EU Securitization Regulation. This decision follows the recent clarifications in the amendments to the Regulation, which are part of the EU Capital Market Recovery Package. The amendments explicitly state that risk retention, transparency, and ban on resecuritization requirements are prudential in nature and, therefore, should be supervised by the competent prudential supervision authorities.
Consequently, the supervision of risk retention, transparency, and ban on resecuritization requirements is an ECB competence. The decision further clarifies the implementation of the regulatory framework, which is an important precondition for a well-functioning securitization market. Over the coming months, ECB will exactly define how it intends to perform these supervisory tasks. It will then communicate further details on its supervisory approach and model, including obligations for banks to notify their supervisor of securitization-related activities.
Related Link: Press Release
Keywords: Europe, EU, Banking, Securitization, Securitization Regulation, Resecuritization, Capital Market Recovery Package, ECB
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