Staff Report
European financial regulators are advancing efforts to simplify oversight and reporting requirements for the region’s €1.2 trillion ($1.3 trillion) asset-backed securities (ABS) market, aiming to enhance efficiency and reduce bureaucratic hurdles.
A newly released report by the Joint Committee of the European Supervisory Authorities outlines key recommendations for policymakers, including the introduction of a “simplified due diligence approach” for institutional investors in both public and private ABS markets. The report, reviewed by Bloomberg News, also advocates for greater regulatory consistency across the 48 authorities supervising the sector or, alternatively, a shift toward a more centralized supervisory model.
Among the primary recommendations are clearer definitions, proportional adjustments to due diligence and transparency requirements, and harmonized supervision across the European Union. These proposals aim to foster a more efficient market while maintaining investor protections.
The report has been submitted to the European Commission for review. The Joint Committee, comprising the European Banking Authority, the European Insurance and Occupational Pensions Authority, and the European Securities and Markets Authority, plays a pivotal role in shaping financial market regulations within the EU.
Efforts to revitalize the ABS market align with the EU’s broader financial strategy. Former European Central Bank President Mario Draghi previously highlighted the importance of expanding the sector to enhance the bloc’s global competitiveness. Financial Services Commissioner Maria Luís Albuquerque has prioritized this initiative as part of ongoing regulatory reforms.
A spokesperson for the European Insurance and Occupational Pensions Authority declined to comment on behalf of the European Supervisory Authorities.
