Cadwalader attorneys examined a working document by the European Parliament Committee on Economic and Monetary Affairs ("ECON") on the European Union's proposed securitization regulation. The working document includes (i) a recast of the European Risk Retention Requirements published by ECON and (ii) the European Parliament's expected legislative timetable for the proposed regulation. The attorneys noted that even though the draft report is "broadly supportive of the legislative proposals" designed to encourage "simple, transparent and standardized" ("STS") securitizations and to "improve the functioning of the securitization markets," a number of members of parliament ("MEPs") remain unconvinced that the benefits of securitization outweigh the potential risks.
Even amongst those who are broadly supportive of the proposals to revive the European securitization market, many view the proposed regulation with caution and intend to scrutinize it closely. Given the concerns of many MEPs, it appears that the legislative progress of the proposed regulation through the European Parliament will not be as quick as the European Commission had originally anticipated.
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