Brian Hayes MEP

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Parliament is doing Capital Markets Union plan a great disservice by dragging its heels – Hayes

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Brian Hayes MEP today (Monday) said that a decision by the Parliament to delay one of the first building blocks of the Commission’s flagship Capital Markets Union plan is doing the whole plan a great disservice. Mr. Hayes was referring to a decision to put on hold the fast-tracking of legislation to boost the EU’s Securitisation market.

“Both the European Commission and the European Council have put in a massive effort to fast-track legislation to revive the EU’s Securitisation market, the first major building block of the Capital Markets Union plan. The Commission released their proposal at the end of September and the Council responded in quick fashion by concluding its position in November.

“It has now emerged that Parliament’s negotiators have put the brakes on the proposal and will not finalise their position until late 2016. This setback could prolong the uncertainty for capital markets in Europe. A new standardised Securitisation regime in the EU has great potential to attract investors and get the EU economy working again. The EU’s Securitisation market has been hit badly by the financial crash and it continues to suffer from a lack of investment.

“At a time when banks’ balance sheets are being squeezed due to new financial regulation, EU legislators should not be dragging their heels on delivering alternative forms of financing to businesses. We need to do all we can to ensure that companies, especially SMEs, have proper access to lending and alternative methods of financing. The Irish Small and Medium Enterprises Association’s (ISME) latest quarterly survey, released today, showed that 43% of the organisation’s members which approached banks for credit between December and February were refused.

“Dublin is well-poised to reap the benefits from the Securitisation proposal. The IFSC has been working in this market for many years. We have almost 800 Irish domiciled securitisation vehicles, valued at about €415 billion, according to Central Bank figures. The quicker this proposal goes through, the better for Dublin’s securitisation industry.

“Parliament’s lead negotiator, Paul Tang MEP, says that the reason for the delay is because he wants the Securitisation proposal to run in parallel with the proposal for a European Deposit Insurance Scheme (EDIS) for bank deposits. This does not make sense as the proposals have very little interaction with each other. The objective of the Securitisation proposal is to channel new forms of financing to businesses while the objective of EDIS is to provide security to bank depositors. We in the EPP are determined to push through Securitisation and other aspects of the Capital Markets Union promptly.

“It is intended that Michael Lewis, author of The Big Short, a book which explains the role of securitisation in the US subprime mortgage crash, will be invited to speak at a public hearing before the Parliament’s Economic and Monetary Affairs Committee.”


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