Cautious Dawn for Europe's New STS Securitisation Regime

Uncertainty on a number of fronts, in particular regarding certain technical aspects of complying with the new criteria has to some extent compounded the difficulties in meeting the complex and onerous certification and reporting requirements required to gain the STS seal of approval. The more beneficial capital treatment for banks, funds and other investors such as insurance companies, some of whom are currently priced out of the securitisation sector in Europe, should improve pricing levels and funding costs. However, meeting the complex criteria required for STS qualification is burdensome.