The European Commission has been accused of "undermining the competitiveness of European financial institutions" by failing to act on securitisation reform.
A joint letter from a group of nine organisations representing key participants in the European securitisation market has warned the stalling was leading to a "strategic loss to the European financial system".
As the macroeconomic environment continues to worsen, the letter recommended urgent targeted measures to support securitisation, such as adjustments to securitisation-related calibrations and mandates for more risk sensitive revisions to be undertaken.
It said: "Securitisation is vital to achieving the objectives of the capital markets union and addressing the very significant financing needs today and in the coming years, including those arising from the green and digital transformations, as well as from the economic impacts of the Covid-19 pandemic and the war in Ukraine."
Securitisation volumes in Europe have been in continual decline in recent years, while other countries have experienced sharp growth, with the US seeing its highest ever issuance levels in 2020 and again in 2021.
Lack of reform has pushed investors "to shift towards other products that do not offer the same advantages in terms of protection, transparency and liquidity," the letter said.
A European Commission's report on securitisation regulation was published last month which ruled out a formal review of the regulation, while the letter noting that almost 80% of respondents to the consultation disagreed that current securitisation regulation has been successful in improving access to credit for the real economy.
The letter's signatories included the European Banking Federation, the Association for Financial Markets in Europe and the Dutch Securitisation Association.
