August 9, 2026

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The European Post

Policy • Diplomacy • Strategic Insight

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Japan Becomes Europe’s Closest Security Partner in AsiaCan Europe’s New Zealand Deal Anchor It in the Pacific?Chip Research Binds Europe and South Korea CloserMinimum Prices Replace Tariffs in Europe’s China Car DealBrussels and Beijing Keep Talking While the Trade Gap WidensKorean Weapons and EU Loans Now Bankroll Europe’s RearmamentNew EU Gas Market Rules Take Effect With Consumer SafeguardsDeforestation Regulation Holds Its December Deadline Despite CutsDigital Omnibus Delays Europe’s High-Risk AI Deadline to 2027Europe’s Schools Confront a Widening Basic Skills GapRule of Law Report Finds Progress but Trust Still LagsIRIS2 Gains 66 Satellites as Brussels Signs the Rollout DealNature Restoration Plans Come Due as Member States Race a DeadlineECB Rates Hold at 2.25 Percent as Frankfurt Waits on the DataEU Budget Talks Turn to Cohesion as Ireland Takes OverWildfire Response Stretches Europe’s Emergency Fleet ThinCan Europe’s Quantum Plan Match Its Big Ambitions?Armenia Edges West as Moscow’s Grip Slips AwayEurope Inherits the World’s Aid Bill It Cannot Fully PayAir Passenger Rights Get Their First Overhaul in Two DecadesJapan Becomes Europe’s Closest Security Partner in AsiaCan Europe’s New Zealand Deal Anchor It in the Pacific?Chip Research Binds Europe and South Korea CloserMinimum Prices Replace Tariffs in Europe’s China Car DealBrussels and Beijing Keep Talking While the Trade Gap WidensKorean Weapons and EU Loans Now Bankroll Europe’s RearmamentNew EU Gas Market Rules Take Effect With Consumer SafeguardsDeforestation Regulation Holds Its December Deadline Despite CutsDigital Omnibus Delays Europe’s High-Risk AI Deadline to 2027Europe’s Schools Confront a Widening Basic Skills GapRule of Law Report Finds Progress but Trust Still LagsIRIS2 Gains 66 Satellites as Brussels Signs the Rollout DealNature Restoration Plans Come Due as Member States Race a DeadlineECB Rates Hold at 2.25 Percent as Frankfurt Waits on the DataEU Budget Talks Turn to Cohesion as Ireland Takes OverWildfire Response Stretches Europe’s Emergency Fleet ThinCan Europe’s Quantum Plan Match Its Big Ambitions?Armenia Edges West as Moscow’s Grip Slips AwayEurope Inherits the World’s Aid Bill It Cannot Fully PayAir Passenger Rights Get Their First Overhaul in Two Decades
August 9, 2026

Newsletter

The European Post

Policy • Diplomacy • Strategic Insight

LATEST
Japan Becomes Europe’s Closest Security Partner in AsiaCan Europe’s New Zealand Deal Anchor It in the Pacific?Chip Research Binds Europe and South Korea CloserMinimum Prices Replace Tariffs in Europe’s China Car DealBrussels and Beijing Keep Talking While the Trade Gap WidensKorean Weapons and EU Loans Now Bankroll Europe’s RearmamentNew EU Gas Market Rules Take Effect With Consumer SafeguardsDeforestation Regulation Holds Its December Deadline Despite CutsDigital Omnibus Delays Europe’s High-Risk AI Deadline to 2027Europe’s Schools Confront a Widening Basic Skills GapRule of Law Report Finds Progress but Trust Still LagsIRIS2 Gains 66 Satellites as Brussels Signs the Rollout DealNature Restoration Plans Come Due as Member States Race a DeadlineECB Rates Hold at 2.25 Percent as Frankfurt Waits on the DataEU Budget Talks Turn to Cohesion as Ireland Takes OverWildfire Response Stretches Europe’s Emergency Fleet ThinCan Europe’s Quantum Plan Match Its Big Ambitions?Armenia Edges West as Moscow’s Grip Slips AwayEurope Inherits the World’s Aid Bill It Cannot Fully PayAir Passenger Rights Get Their First Overhaul in Two DecadesJapan Becomes Europe’s Closest Security Partner in AsiaCan Europe’s New Zealand Deal Anchor It in the Pacific?Chip Research Binds Europe and South Korea CloserMinimum Prices Replace Tariffs in Europe’s China Car DealBrussels and Beijing Keep Talking While the Trade Gap WidensKorean Weapons and EU Loans Now Bankroll Europe’s RearmamentNew EU Gas Market Rules Take Effect With Consumer SafeguardsDeforestation Regulation Holds Its December Deadline Despite CutsDigital Omnibus Delays Europe’s High-Risk AI Deadline to 2027Europe’s Schools Confront a Widening Basic Skills GapRule of Law Report Finds Progress but Trust Still LagsIRIS2 Gains 66 Satellites as Brussels Signs the Rollout DealNature Restoration Plans Come Due as Member States Race a DeadlineECB Rates Hold at 2.25 Percent as Frankfurt Waits on the DataEU Budget Talks Turn to Cohesion as Ireland Takes OverWildfire Response Stretches Europe’s Emergency Fleet ThinCan Europe’s Quantum Plan Match Its Big Ambitions?Armenia Edges West as Moscow’s Grip Slips AwayEurope Inherits the World’s Aid Bill It Cannot Fully PayAir Passenger Rights Get Their First Overhaul in Two Decades

Banks Win A Cautious Green Light To Repackage Their Loans Again

Pedro Amenábar
Senior Correspondent

Stockholm: A financial instrument that became shorthand for the last great crisis is being deliberately revived, and the Union’s working party on banking is grinding through the technical detail that will decide whether the revival is bold or timid. Securitisation, the practice of bundling loans into tradable securities, sits at the heart of the bloc’s drive to build a savings and investments union. The Commission tabled proposals in 2025 to simplify the rulebook, the Council agreed a negotiating position late that year, and officials are now hammering the text into something banks can actually use.

The mechanics are less sinister than the word’s reputation suggests. A bank pools assets it already holds, such as corporate loans, mortgages or consumer credit, and turns them into securities sold to institutional investors. The cash returns to the bank, and the risk migrates to those better placed, in theory, to bear it. With the loans off its books, the bank can lend again. Multiply that across the system and the promise is a larger flow of credit to the small firms and infrastructure projects Europe keeps insisting it must finance itself rather than outsourcing to deeper markets abroad.

The promise has gone largely unfulfilled in Europe because the post-crisis rulebook, written in justified fear, made the whole exercise expensive and cumbersome. Capital charges were heavy, disclosure demands onerous, and the due-diligence burden enough to deter all but the most committed. The result was a European securitisation market that shrivelled even as the American one recovered, leaving European banks holding risk they might have shed and lending less than they might have. The reform aims to recalibrate that caution without inviting back the recklessness that made securitisation infamous in 2008.

That balance is the entire argument. Supporters insist the assets being repackaged today are real loans to real businesses, not the opaque chains of subprime mortgages that detonated nearly two decades ago, and that simpler, transparent securitisation is a tool the bloc cannot afford to leave on the shelf when it needs vast sums of private capital for defence, housing and the green transition. Sceptics, including more than a few central bankers, warn that loosening the rules always feels safe at the top of a cycle and dangerous only in hindsight, and that risk shed by banks does not vanish but settles somewhere, often somewhere less visible.

The working party’s task is to translate that philosophical standoff into thresholds, definitions and capital weights. How much regulatory relief, for which kinds of deals, with what transparency attached, and how to treat the simple and standardised label that is meant to mark the safer end of the market. These are dry questions with large consequences, and the gap between a framework that genuinely frees up bank balance sheets and one that merely tinkers at the edges lies precisely in such detail.

The Commissioner responsible has suggested the remaining pieces of the savings and investments union could be agreed within a year, an optimistic timetable for a file this contested. Whatever the pace, the direction is set. Europe has decided that the instrument it once blamed for a catastrophe is also part of the answer to its chronic shortage of investment, and is betting that this time the guardrails will hold.

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