Outlook for the Securitisation Market

Abstract

Securitisation issuance has slumped in recent years, with the market having become increasingly dependent on central bank and government support in both Europe and the United States. Despite facing a number of threats that could inhibit a recovery in the shorter term, the securitisation market is expected to recover over a longer term horizon. Funding costs have improved, but investor confidence in the asset class remains weak, and the impact of regulatory reform is as yet difficult to fully assess. A long-term sustainable recovery for the securitisation market remains in the hands of regulators and policy makers. They must be awake to the possibility that a recovery in securitisation markets could be a prerequisite to unlocking credit markets in general and supporting a wider global economic recovery.

Keywords: securitisation, mortgage-backed securities, outlook, new regulations

JEL Classification: A1, E6, F3, G1, G2, G3