EU’s Securitization Revamp Set to Halve Some Capital Buffers

The European Union is proposing new rules that would make it easier for banks to sell off mortgages and reduce by half the amount of capital they must hold against certain bundled loans they keep on their books, according to documents seen by Bloomberg.

The EU is due to announce plans to overhaul the bloc’s securitization market next month, after lengthy discussions with industry players and other stakeholders. In a typical year, around €200 billion ($227 billion) of debt is packaged into securities in the region, compared with around €2 trillion in the US.