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14 June 2011

AFME: Europe needs an expanded securitisation market

Simon Lewis said that an expanded and stronger securitisation market will be critical to Europe's recovery from recession.

Opening the annual Global ABS (asset-backed securities) Conference, taking place in Brussels, Simon Lewis, chief executive of the Association for Financial Markets in Europe told delegates: "Europe's funding needs in the coming years will be considerable - the ECB estimates that €1,000 billion of debt is due for refinancing over the next two years - so it is crucial that a stronger and reinforced securitisation market plays its part in this, alongside other funding tools such as bank lending, covered bonds and retail deposits. We believe strongly that no single type of borrowing can provide a complete solution to Europe’s funding needs; all have their part to play in a balanced funding strategy. Rebuilding the confidence of investors and regulators in the securitisation market is critical not just for the recovery of our market but also for Europe's recovery from recession".

Mr Lewis also highlighted the performance of European securitisations during and since the financial crisis, telling the conference: "Four years after the onset of the crisis, European securitisation has shown that it has withstood the crisis well in credit terms. Asset performance for mainstream, "real economy" assets such as residential mortgages, car and consumer loans and credit card securitisations has been very strong, and well within expectations. For example, the cumulative defaults incurred by European mortgage-backed securities in mid-2007 - at the height of the "boom" - through to today amounts to only 0.07 per cent”.

The two-day Global ABS Conference is the largest gathering of securitisation experts in Europe, attracting over 3,000 delegates, including more than 1,100 investors and issuers, as well as central bankers, regulators, government officials and private sector participants.

Press release


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