The prudential regulatory and supervisory requirements for consumer credit providers in Europe, as well as access to diversified funding through capital markets with the main focus on securitisation, are key advocacy areas for Eurofinas.
A rapid pace of regulatory change
Following the global financial crisis of 2008, the prudential supervision of banks and other credit providers has seen an unprecedented period of regulatory change. A significant number of new rules and standards has led to complete overhaul in the banking sector numerous times in the last decade. With the implementation of Basel IV in Europe, recovery from an unprecedented global pandemic, rising non-performing loans, and a strong sustainable finance push on the agenda in the coming years, this pace of regulatory change is not slowing down yet. Ensuring the relevant and proportionate treatment of the sector, is pre-requisite to safeguard competition and choice for consumers.
Implementation of Basel IV
We advocate for proportionate capital treatment which takes into account the risk profile of diverse and proven business models when implementing Basel IV in Europe, including topics such as supporting factors and operational risk etc.
Maintaining an efficient and fair consumer credit market, with rules for handling non-performing loans (including measuring and managing NPLS, their prudential treatment, and the development of secondary markets) that consider the resources available in different sizes of firms is key for the proper functioning of the sector.
Capital Markets Union (CMU) – securitisation
We support the development of a safe securitisation market in Europe, in addition to supporting the Capital Markets Union (CMU) initiative to reduce barriers to cross-border finance and diversify sources of finance utilised by specialist consumer credit providers.
Ensuring ECB financing programmes such as the Targeted Longer-Term Refinancing Operations (TLTROs) or the asset purchase programmes are accessible to consumer credit providers is important to ensure a level-playing field within financial services.