While securitisation issuance has already picked up in recent years, the securitisation framework reforms aim to make this route even easier for banks by streamlining transparency requirements and reducing reporting burdens. Mandatory reporting fields would be cut by at least 35%, with some becoming voluntary. For highly granular, short‑term asset pools, issuers may provide aggregate rather than loan‑level data.
Beyond these transparency changes, the package also broadens the homogeneity rules under the framework for Simple, Transparent and Standardised (STS) securitisations. SME‑focused pools will already qualify as homogeneous when at least 70% of the exposures are SME‑related. The remaining portion of the pool can include other exposures, including from different member states. This should support the STS securitisation of SME loans and facilitate cross-border securitisations.
Besides, in its response to the European Commission’s Call for Advice on covered bonds, the EBA expressed no urgency in exploring the introduction of a covered bond-like dual-recourse instrument for SME financing (European Secured Notes (ESN)), postponing this to the medium term, subject to market developments and interest. Hence, for now, there is no low-cost dual-recourse alternative to securitisation for these loans.
Regardless of these measures making securitisation more accessible, we do not expect them to materially erode the covered bond market. Securitisation largely involves loans that are not used as collateral for covered bonds. In that regard, they are more complementary than supplementary to covered bonds.
In 2025, residential and commercial mortgage-backed securities (MBS) accounted for less than a third of the placed securitisations by European banks. Even if the securitisation package makes MBS issuance more competitive to covered bonds, e.g. through lower risk weights or the removal of the 5yr remaining weighted average life (WAL) criterion for LCR eligibility purposes, not all banks may have the mortgage loan balance sheet capacity to issue both covered bonds and MBS.
Since the global financial crisis, the mortgage-backed securities market has steadily lost issuer market share to covered bonds, largely due to the latter’s more favourable regulatory treatment and funding cost advantages, but also due to the larger complexities of setting up and maintaining a securitisation transaction. Issuers with smaller balance sheets are unlikely to reduce their visibility in the covered bond market for an occasional RMBS transaction, unless such a switch would make sense from a funding cost perspective. We expect them to continue using their residential mortgage portfolios for covered bond issuance to maintain a benchmark curve and a regular market presence.