CashNews.co
(Bloomberg) — The lobby group representing Deutsche Bank AG and Commerzbank AG has urged the German government to seize on the recent interest in reviving the securitization market as a way to boost lending across the region.
European Union rules on securitization scare off investors because they’re overly bureaucratic and make transactions too costly, Commerzbank’s Chief Executive Officer Manfred Knof said during the banking lobby securitization forum on Monday.
Boosting that market would, among other things, free up lending for the transition to a more sustainable and digital economy, he added, speaking at the ESMT Business School in Berlin.
European politicians, scarred by the fallout from the 2008 financial crisis, have looked skeptically at banks’ efforts to slice up loans and sell them on to investors. Because banks are limited in their efforts to free up capital via securitization, they can’t lend as much to companies.
The need for additional funding sources is driving a rethink however, with ex-European Central Bank President Mario Draghi calling for efforts to deepen the financing method earlier this month.
“Securitization is once again seen as an important and sensible tool,” Knof, who is also a board member at the Association of German Banks, said in prepared remarks. “It is the bridge between bank-based corporate finance and capital markets. That’s why it’s almost indispensable to mobilize enough capital for the big challenges of our time.”
The lobby said it submitted a report on securitization to the German Finance Ministry together with True Sale International.
“The report contains good suggestions that we want to pursue here and in Brussels,” Heiko Thoms, a deputy finance minister, said at the conference. “This new focus is overdue. We cannot be satisfied with our competitiveness or the situation in the EU. The analysis can hardly be disputed.”
©2024 Bloomberg L.P.