Good Securitisation, Bad Securitisation and the Quest for Sustainable EU Capital Markets

Abstract

This article provides a critical review of the joint initiative undertaken by the Bank of England and the European Central Bank, to resuscitate the EU securitisation market in the wake of the global financial crisis. This article argues that, despite offering a valuable framework to define “good securitisation”, the BoE/ECB project lacks sufficient clarity on questions related to the necessary degree of standardisation, information disclosure and reliance on credit rating agencies. These problems contribute to questioning at a higher policy level whether securitisation will still fuel the shadow banking system and cause systemic risks.