The Council of the European Union has endorsed its position on overhauling the EU securitisation framework, marking a pivotal step in revitalising the market as part of the Savings and Investment Union strategy launched in March 2025. According to Public Affairs Bruxelles and EU Agenda, the agreement aims to ease regulatory burdens, free up bank lending capacity and channel household savings into productive investments supporting green, digital and defence priorities.
The Council of the European Union agreed its position on proposals to revitalise the EU’s securitisation market on 19 December 2025 in Brussels, advancing the European Commission’s legislative package introduced on 17 June 2025 to amend the Securitisation Regulation, Capital Requirements Regulation and Liquidity Coverage Ratio framework. This development supports the broader Savings and Investment Union initiative, which seeks to enhance financial opportunities for EU citizens, boost economic competitiveness and redirect bank deposits into capital markets, as outlined by the European Commission on 19 March 2025.
Council Finalises Stance on Key Securitisation Overhaul
The Council’s agreement represents a general approach on the Commission’s reform package, which targets long-standing market concerns including high operational costs and capital requirements that have constrained securitisation activity since the framework’s inception. According to JD Supra, the reforms constitute the first Savings and Investment Union measure, testing the balance between financial stability, international alignment and growth objectives, with the Council finalising its position on 19 December 2025 following draft ECON committee reports published on 11 December 2025. Public Affairs Bruxelles reports that the position supports EU competitiveness by addressing these hurdles to enable banks to redistribute credit risk to capital markets and diversify investor portfolios.
As reported by EU Agenda, the Council today agreed on its position on revitalising the EU’s securitisation framework, in support of EU competitiveness.
Securitisation Reforms Anchor Savings and Investment Union Strategy
The Savings and Investment Union strategy, announced in the European Commission’s Competitive Compass on 29 January 2025 and detailed on 19 March 2025, builds on prior Capital Markets Union efforts to integrate EU financial markets, reduce fragmentation and mobilise private financing for priorities including innovation, digitalisation, defence and the green transition. PwC Legal states that the SIU aims to enhance EU citizens’ wealth, improve financial intermediation and increase retail participation in capital markets, with securitisation identified as the inaugural legislative priority to reshape how savings are invested across the continent.
The European Parliament’s Think Tank briefing, written by Issam Hallak, notes that the SIU action plan responds to the Draghi and Letta reports on strengthening the single market and competitiveness, placing strong emphasis on channelling EU savings into productive investments. BusinessEurope’s response to the Commission’s call for evidence highlights the need to boost the securitisation market to enable banks to free up capital and liquidity for additional funding to EU businesses, addressing persistent market dispersion and investor home bias.
Legislative Timeline and Complementary Proposals
On 17 June 2025, the Commission published its core legislative proposal to overhaul the Securitisation Regulation alongside amendments to the Capital Requirements Regulation and Liquidity Coverage Ratio, followed on 18 July 2025 by proposals to ease Solvency II capital requirements for insurers, according to Loomis Sayles analysis by Sean Saia and Erik Troutman. Mayer Brown reports that these wide-ranging reforms seek a principles-based framework to reduce burdens, enhance risk sensitivity for non-simple transparent securitisations and align treatment more closely with corporate bonds, expecting increased securitisation to support lending for EU households and businesses.
Stakeholder Reactions and Market Expectations
Investor associations, as per a joint statement published by ICMA, welcome the proposed reforms aimed at revitalising the EU securitisation market, which they deem essential to the Savings and Investment Union, small and medium-sized enterprise funding, and Europe’s green and digital transitions. However, the associations express concern that certain measures under consideration could discourage rather than encourage investment. JD Supra indicates that future reports under the revised Securitisation Regulation, including the next Article 44 assessment due five years after entry into force, will evaluate securitisation’s contribution to financing EU companies and the economy, with ECON stressing impacts on SMEs and households; final ECON reports are expected in early January 2026 ahead of a 27 January amendments deadline and 5 May 2026 approval vote.
The Commission’s evaluation, as detailed by Mayer Brown, criticises the current conservative prudential treatment of non-STS securitisation for lacking risk sensitivity, proposing lower capital requirements for senior tranches and slight reductions for non-senior ones under Solvency II revisions slated for consultation in the second half of 2025.
The Council’s position paves the way for trilogue negotiations with the European Parliament and Commission on the securitisation reform package, integral to the Savings and Investment Union strategy’s goal of fostering a more integrated EU capital markets framework.
