Trillions of euros sit in European bank accounts and savings products earning very little, while companies across the continent complain they cannot raise the capital they need to grow. Closing that gap is the central ambition of the savings and investments union, and the most technical piece of the project is now moving through the legislative machine: a reform of the rules governing securitisation.
Securitisation has an image problem rooted in the 2008 crash, when opaque bundles of American mortgages helped detonate the global financial system. Stripped of the jargon, though, the technique is simple. A bank pools loans it has already made, packages them into tradable securities, and sells them to investors. Done carefully and supervised properly, this frees up room on the bank’s balance sheet, allowing it to lend again to households and small firms. Europe has used the tool far more timidly than the United States, and policymakers increasingly see that caution as a brake on growth rather than a virtue.
The legislative process is well advanced but far from finished. The Commission tabled its proposals in June last year. The Council agreed a negotiating position in December, and the European Parliament’s economic affairs committee approved its own stance on 6 May. Trilogue talks, where the institutions hammer out a single text, are expected in the second half of the year and could stretch into 2027 if the gaps prove stubborn.
And the gaps are real. The Council and Parliament diverge on how much information banks must report on private securitisations, with one camp favouring a central repository and another preferring lighter reporting to national authorities. They disagree on how to define a homogeneous pool of assets for small-business loans, on the liability that follows when reporting duties are delegated, and on who may provide credit protection in synthetic structures. These sound like footnotes, but they determine whether the reform actually shifts risk and frees up lending or simply rebrands the status quo with friendlier paperwork.
Investors and banks are watching closely, and not all of them are satisfied. Several industry voices have warned that the reform lacks ambition and that without bolder changes to how securitised assets are treated for capital purposes, the market will stay small. Supervisors at the European Central Bank, meanwhile, have been making the case that banks should evolve from passive intermediaries into strategic enablers that channel savings toward productive investment, with securitisation one of the levers.
There is a parallel effort that will shape the verdict. The Commission launched a consultation in February on the competitiveness of the banking sector and intends to publish its findings in July, with a fuller report expected in the third quarter. Together, the securitisation file and that review will reveal how serious the bloc is about turning idle savings into investment rather than leaving the ambition trapped in conference speeches.
The stakes are easy to state and hard to meet. Europe wants its citizens’ money working harder, its companies better financed, and its banks more competitive against larger American rivals, all without inviting back the recklessness that securitisation once enabled. Whether the final text strikes that balance, or settles for a cautious compromise that pleases no one, will be decided in the negotiating rooms over the coming months.
