FSB invites feedback on the effects of G20 financial regulatory reforms on securitisation

The FSB has called for feedback on the impact of G20 financial regulatory reforms on the securitisation market. These reforms were initiated in response to the 2008 global financial crisis and aimed to address issues related to information asymmetries and incentives in securitisation markets.
The reforms encompassed several key aspects, including increased capital requirements for banks in relation to their securitisation-related exposures, improvements in disclosures and standardisation, and the mitigation of incentive problems through retention requirements and enhancements in the rating process.
The FSB is now at a stage where it can evaluate the effectiveness of these securitisation reforms. This evaluation will assess whether the G20 reforms have achieved their intended objectives in terms of financial stability. It will also examine their broader implications on the functioning and structure of securitisation markets and their impact on financing for the real economy.
The FSB is particularly interested in feedback from stakeholders on several specific issues. These include the extent to which the securitisation reforms have successfully reduced systemic and moral hazard risks, the specific reforms that have had the most significant impact on originators, sponsors, and investors, and the broader effects of these reforms on securitisation markets and financing for the real economy.
The evaluation is crucial as it addresses a core area of post-crisis reforms that are relevant for financial stability. These reforms are significant for both banking and non-bank financial intermediation sectors due to the interconnectedness between the two.
To streamline the evaluation process, the FSB plans to minimize the number of interim deliverables, leverage existing data, seek analytical support from other FSB groups, and conduct a public consultation process based on interim findings. The evaluation report will provide an overview of the motivation, objectives, scope, and approach of the exercise, summarize relevant reforms, and offer an assessment of their effects. It will not include specific policy recommendations but will serve as input for appropriate bodies to consider potential amendments to standards or policies.
Feedback from stakeholders is encouraged and should be submitted by 22 September 2023 to fsb@fsb.org with the subject heading „Securitisation evaluation“. Responses will be made public on the FSB’s website unless otherwise requested. Preliminary findings will be published for public consultation in early 2024, with the final evaluation report expected around mid-2024.