Good afternoon,

Today in College, we have approved the securitisation package.

Let me start by saying briefly in laymans terms what this is about. Securitisation is a tool used in financial markets that allows banks to package parts of their assets - namely loans, for example - and those packaged loans can be sold to other financial market participants like insurance companies, pension funds, or other banks.

Why is this relevant? Because it allows banks to have more room to lend. The changes that we are proposing will also allow banks to do this in a more efficient way.

So we expect to see additional lending - potentially at a lower cost - to the economy, corporates, namely SMEs, and households. We also expect to get from here a better connection between banking and capital markets, because these packaged loans - these securitisations - will actually be traded as capital markets products. And it will also allow us to have a better risk management because the risk will be distributed across the financial sector.

I would also like to highlight that this is an instrument that did cause problems in financial markets in the past, namely in the great financial crisis, but one should not confuse the instrument and its misuse.

The instrument itself is important for financial markets. It does allow a better management of risk and a better management of the resources within the financial sector. And we have learned the lessons from the previous crisis.

What we are doing now will preserve financial stability and we have been very careful in this recalibration of the framework to stimulate the use of securitisation, but not introducing excessive risk in the system.

When it comes to the pieces of legislation that we will be proposing to change: first, there is the Securitisation Regulation, which sets out the product rules and the conduct rules for issuers and investors; second, the Capital Requirements Regulation, which sets the capital requirements for banks issuing and investing into securitisation. We are making the framework more risk-sensitive.

We will also have two Delegated Acts. One is the Liquidity Coverage Ratio Delegated Act, which deals with the use of securitisation for the liquidity buffers in the banks. The other one is Solvency II, related to the part which I mentioned before, having insurance companies in particular -also some pension funds, but not many-, allowing also them to engage more into this market and contributing to the benefits of using the securitisation instrument more efficiently in our financial sector.

Basically, this is an instrument that we are trying to revitalise. What we know is that its use in Europe is much lower than in other jurisdictions. And we think it can actually help significantly in reviving our markets.

This is the first legislative proposal coming out of the Savings and Investments Union Strategy. Others will follow, but we think this one will actually contribute to the objectives of the Savings and Investments Union.