This week’s Parliament vote on securitisation, and the ECOFIN discussion on the Market Integration and Supervision Package (MISP), may appear to concern separate technical files. In reality, they are part of the same test: whether Europe can build capital markets capable of turning savings into productive investment.
That is the central ambition of the Savings and Investment Union (SIU). Europe does not lack savings. But savings do not become investments on their own. They require both a deeper supply of investable assets and a more integrated framework for cross-border investment.
Securitisation and MISP speak directly to those two needs. Securitisation will influence whether Europe can generate investable assets at scale. MISP will determine whether capital can move across borders with greater clarity, consistency, and efficiency.
Both are necessary. Neither is sufficient on its own.
Today, Europe falls short on both. Its securitisation market remains too limited, while supervisory fragmentation and operational complexity continue to make cross-border investment harder than it should be.
A well-functioning securitisation market is a critical component of capital formation. It supports bank lending, enables the redistribution of risk, and provides investors with diversified, income-generating assets. For long-term investors, including pension funds, it offers access to assets aligned with their investment objectives. Yet, Europe’s securitisation market remains underdeveloped.
While the current proposal recognises the need to strengthen the framework, the outcome will depend on calibration. Participation at scale requires three conditions: access to a sufficiently broad pool of assets, the ability to assess risk without disproportionate operational burden, and a regulatory environment that is proportionate and predictable.
On each of these dimensions, the EU still risks falling short. The framework remains largely inward-looking, with limited accommodation for non-EU exposures. Due diligence requirements, though well-intentioned, remain complex. Disclosure regimes continue to lean toward prescriptive approaches that may deter rather than enable participation.
If securitisation is to contribute meaningfully to the SIU, the framework must reflect how investors allocate capital in practice: globally, selectively, and with a focus on risk-adjusted returns. That requires reducing unnecessary frictions while maintaining robust safeguards.
If securitisation is about depth, MISP is about function.
Europe’s asset management industry operates within a single market that, in practice, remains fragmented. Differences in supervisory approaches, national discretions, and implementation practices create complexity that ultimately reduces the efficiency of cross-border investment.
“If securitisation is about depth, MISP is about function”
MISP offers an opportunity to address these issues. The objective should be clear: to deliver greater supervisory convergence and more consistent outcomes across member states.
But convergence should not be conflated with centralisation. While more centralised supervision may be under discussion for some market participants, asset management is different. National competent authorities play a critical role and must remain central to supervision. The priority should be practical alignment: stronger cooperation, better use of data, and a clearer ability to address the sources of fragmentation: divergent interpretations, national gold-plating, and inconsistent supervisory expectations.
A more pan-European role for the European Securities and Markets Authority (ESMA) should support that work, not create an additional layer of oversight that adds complexity without delivering meaningful convergence.
Europe must address both sides of the equation: the creation of investable assets and the conditions that allow capital to move efficiently across borders.
Progress in securitisation without progress in supervisory convergence will limit scale. Progress in convergence without sufficient market depth will limit opportunity. The two are interdependent, and their effectiveness will be determined by how well they operate together.
The coming months offer a meaningful window to move from ambition to delivery. Well-calibrated securitisation reforms, combined with credible and practical supervisory convergence, can materially improve how Europe’s capital markets function.
The goal is not to replicate other jurisdictions. It is to ensure that Europe’s framework is coherent, competitive, and capable of supporting both investors and the real economy.
The decisions being taken over the coming months will send a clear signal to investors, the global financial markets, and European savers alike. They will determine whether Europe can build capital markets with the depth, integration, and efficiency needed to turn savings into investment at scale.
As securitisation enters trilogues, the focus should remain on whether the final framework removes barriers that continue to limit investor participation and market depth. A better securitisation outcome would expand the supply of investable assets and support deeper European capital markets.
But depth alone is not enough. MISP must also reduce cross-border frictions and deliver more consistent supervisory outcomes for asset management. Together, these reforms will help determine whether the SIU can deliver real investment opportunities for investors in Europe and across the globe.
Tracey Wingate is chief global affairs officer at the Investment Company Institute
