These are the key issues that will move the financial world, and securitisation markets in particular, in the early autumn of 2020:
Securitisation transactions: Technology, processing and innovation
What are the effects of blockchain and cryptocurrency technologies on securitisation transactions, and what further developments can be expected? What is the experience with the new regulation regarding data transparency for securitisations and what new requirements, possibly from the upcoming sustainable finance regulation, are foreseeable? What significance do trustees and substitute servicers have in the event of the loss of a transaction party?
Regulation issues for asset-based finance and securitisations
The exchange of experiences on STS implementation for ABS and ABCP transactions will continue to be of great importance for market participants in 2020. However, new topics will be added, such as the inclusion of synthetic securitisations in the STS securitisation framework. The regulatory framework for ABS investments outside the banking sector (insurance companies, pension funds, etc.) will also attract growing interest. And last but not least, there are also burning regulatory issues beyond the STS Regulation, such as the treatment of securitisations in significant risk transfer (SRT), the current discussions about expanding the LCR inclusion of ABS, and much more.
Market development - new fields for securitisations
However, the continued use of securitisation as an instrument and market developments in this segment are of decisive interest. It is already foreseeable that securitisations will find new fields of application in the course of the economic upheaval: in the sharing economy, in marketplace lending, but also in the transition to a carbon-neutral economy. Crypto and digital assets will also bring new market potential for securitisations. E-mobility and the restructuring of automobile manufacturers' business models will have a major impact on the market for car securitisations. And it is certainly questionable whether the increasing intangible assets resulting from digitalisation can also be exploited for securitisation technology.
A look at the established securitisation markets and asset classes in turbulent times
But the established asset classes and markets will also receive a great deal of attention in autumn 2020. The economic development, the development of the interest rate environment and the already overheated real estate markets in many places will not leave the RMBS markets unaffected; car securitisations will be assessed against the background of the effects of the upcoming changes in the ’mobility business model’. After all these years of falling risk costs, the focus of SME loans and SME financing is on economic developments; the same applies to managed CLOs. The securitisation of trade receivables as crisis-proof working capital financing will most probably be in greater demand from industry and trade, as will supply chain financing, and for many leasing companies securitisation as a refinancing instrument will become even more interesting than before.
In view of the low capital efficiency of many European and, in particular, German banks and the forthcoming new capital requirements as a result of the Basel III amendments, classical securitisation will also become more important as an instrument for equity capital management.
And in general, it is important to emphasise this: Today, European ABS are clearly among the most stable asset classes for investors.
Market environment in 2020 - real economy and finance industry in difficult times
But over all this hangs the question what market environment we will find in autumn 2020. It should already be clear today that the real economic transformation (e-mobility, digitalisation, modernisation of infrastructure and the energy system) will continue to gain momentum. This applies even more to the financial sector, which, in addition to digitalisation and increasing competition, will have to adapt to new burdens from regulation and interest rate policy and may also be confronted with rising risk costs.
We are already looking forward to discussing and preparing these topics with you as a partner and sponsor in the run-up to the congress and - as in previous years - to having all the topics that will move the community on the agenda at the congress in October 2020.