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By Kifaya Belkaaloul, Head of Regulatory at NeoXam.
It is hard to think of another financial term that carries as much historical baggage as Securitisation. For many investors, it still triggers nightmares of the global financial crisis and the sense that complexity itself is a risk. That legacy continues to linger. Yet, among EU regulators, Securitisation is once again being discussed as a practical mechanism to support much needed growth, particularly in the context of the EU’s Savings and Investment Union (SIU), which explicitly aims to revitalise Securitisation Markets.
The backdrop is all too familiar. Europe needs to fund companies, infrastructure and innovation at scale, but policymakers are increasingly reluctant to rely solely on banks to do so. Instead, the focus has shifted toward long-term investors. This is the logic underpinning the EU’s drive to deepen its Capital Markets and encourage savings to flow more directly from deposit accounts into productive investment. which is precisely the objective pursued by current EU initiatives to reboot Securitisation, including a review of the STS framework.
Securitisation fits naturally into this agenda. At its core, it transforms pools of loans or receivables into investable assets. That process can release capacity within the banking system, but more importantly, it creates a bridge between improving returns for long-term savers and funding long-term economic needs. In policy terms, it supports disintermediation by allowing markets, rather than banks alone, to finance growth.
Insurance companies sit at the centre of this renewed interest. Their business model is built on collecting premiums today and paying claims far into the future. That makes them natural holders of long-dated, income-generating assets. Regulators are now seeking to encourage insurers to play a greater role in Securitisation Markets, notably by revisiting Solvency II capital charges to better reflect the long-term nature and risk profile of high-quality Securitised Assets, making it more attractive for insurers to invest in securitised products that meet defined standards.
This does not represent a return to the past. On the contrary. Today’s Securitisation framework is far more tightly regulated, with clearer rules on transparency, risk retention and oversight. The goal is not to create complexity for its own sake, but to mobilise capital in a way that is stable and understandable. Securitisation is being reframed as a funding tool rather than a trading instrument.
What has changed most is how Securitisation is being used. It is no longer confined to individual securities held on balance sheets. Increasingly, Securitised Assets are managed through dedicated fund structures, including Evergreen Funds designed to accommodate a broader investor base. That shift brings operational challenges that are just as important as the financial ones.
This is where the real test lies. Securitisation involves numerous participants including product originators, trustees, Fund Managers, Asset Servicers, Custodians, not to mention regulators. Each produces data, often in different formats and on different timelines. Performance, risk, cash flows and compliance information can quickly become fragmented. Without a coherent way to bring that information together, oversight becomes difficult and confidence erodes.
The main challenge for Securitisation is no longer around financial engineering but a data problem. If investors, insurers or regulators cannot see the same information in a consistent and timely way, the structure becomes harder to justify. Transparency is not an abstract regulatory ideal, it is what determines whether these instruments can scale safely.
Europe’s ambition is to move funding away from banks and toward markets, particularly for mortgages, consumer credit and smaller businesses. Securitisation can help achieve that ambition, but only if it is supported by robust data infrastructure. The lesson from the past is not that Securitisation is inherently flawed, but that opacity is.
If Securitisation is to reclaim a central role in Europe’s growth strategy, the emphasis must shift. The success of this next phase will depend less on clever structures and more on clear, consolidated information. Get that right, and Securitisation becomes a lever to pull for economic growth, rather than a risk as has been the view of many as since 2008.
