The aim of the present article is to analyze the impact of EU Regulation no. 2402/2017, trying to answer the question if the new European regulatory framework can be considered a solution to the defects of securitisation re- vealed during the subprime financial crisis. In the first chapter criticalities of securitisation will be highlighted; despite the fact that there are several controversial aspects, this paper will focus only on the problem concerning the moral hazard generated by the originate-to-distribute model which is at the basis of the securitisation process. Because of the originate-to-distribute model, the originator usually takes higher risk, considering that it will transfer the risk to other investors through the medium of the securitisation. After that, the second chapter will analyse what are the solutions adopted by the EU Regulation no. 2402/2017 and, in particular, it will focus on Article 6, which introduces the risk retention principle. The third chapter concerns the effectiveness of the risk retention solution. In order to analyse the impact that this provision will have on the markets, it is use- ful to compare article 6 of the EU Regulation with the Dodd-Frank Act, which introduced a similar provision for securitisations negotiated in the US financial market. In order to verify the effectiveness of the credit risk retention provision, this paper will analyse it both from an economic and legal point of view.

The New European Regulatory Framework on Securitisation: Can EU Regulation no. 2402/2017 be considered a solution to the defects of securitisation revealed during the subprime financial crisis?

Nicolò Galasso
2020

Abstract

The aim of the present article is to analyze the impact of EU Regulation no. 2402/2017, trying to answer the question if the new European regulatory framework can be considered a solution to the defects of securitisation re- vealed during the subprime financial crisis. In the first chapter criticalities of securitisation will be highlighted; despite the fact that there are several controversial aspects, this paper will focus only on the problem concerning the moral hazard generated by the originate-to-distribute model which is at the basis of the securitisation process. Because of the originate-to-distribute model, the originator usually takes higher risk, considering that it will transfer the risk to other investors through the medium of the securitisation. After that, the second chapter will analyse what are the solutions adopted by the EU Regulation no. 2402/2017 and, in particular, it will focus on Article 6, which introduces the risk retention principle. The third chapter concerns the effectiveness of the risk retention solution. In order to analyse the impact that this provision will have on the markets, it is use- ful to compare article 6 of the EU Regulation with the Dodd-Frank Act, which introduced a similar provision for securitisations negotiated in the US financial market. In order to verify the effectiveness of the credit risk retention provision, this paper will analyse it both from an economic and legal point of view.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10278/5005441
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