Cologne: Council and Parliament negotiators struck a provisional deal on 21 October 2026 that rewrites the EU securitisation rules, letting banks free up capital and lend more to households, small firms and infrastructure projects. The agreement belongs to the savings and investments union and to the leaders’ “One Europe, One Market” agenda.
The deal amends two laws: the securitisation framework regulation and the prudential requirements regulation. Negotiators recalibrated capital charges on a risk-sensitive basis, so low-risk securitisations will carry materially lower requirements while riskier positions keep higher ones. According to the Council press release, the aim is to let banks “free up more capital” for the real economy.
The revised securitisation rules also create a new “resilient” category and strengthen the simple, transparent and standardised label, known as STS. EU-level supervision will cover the independent third-party verifiers that check STS compliance, which should pull national supervisory practices closer together. Negotiators also cut compliance duties compared with the current regime.
Investors gain new room as well. The text raises investment limits for UCITS funds, lets insurers and reinsurers take part in synthetic securitisation, and allows securitisations to finance projects before they become operational. The Council says these targeted changes support cross-border integration of the market.
Both institutions must now finalise the legal texts and formally endorse them before the new securitisation rules can apply. The press release gives no date for those votes. Banks and investors will study the final wording on capital charges, because that calibration decides how much capital each deal really releases.
Banks will read the final text closely for how the new resilient category interacts with the STS label, because the release does not spell out the thresholds. Supervisors will also watch the third-party verifiers, since a weak STS check would undermine the label that investors rely on when they buy these products.
Insurers deserve attention too. Allowing insurers and reinsurers to take part in synthetic securitisation widens the pool of buyers for risk transfer, while higher UCITS limits open the door for funds that serve retail savers. Those changes tie the file to the wider savings and investments union, which seeks to channel household savings into productive investment, and they explain why negotiators treated the securitisation rules as a priority.
The file matters because European leaders have long tied securitisation to deeper capital markets. The Letta and Draghi reports both recommended reviving the market to strengthen the lending capacity of European banks. Leaders launched the “One Europe, One Market” agenda in March 2026 and reviewed progress at their 15-16 October 2026 summit.
Securitisation bundles loans such as mortgages or SME credit into securities that investors buy, which moves risk off bank balance sheets and frees room for new lending. The EU standard for simple and transparent products has applied since 2019, and the reform responds to complaints that the old securitisation rules charged too much capital even for safe deals. The final text will show how far the new securitisation rules go in changing that.
