Balance sheet synthetic segment has a high market quality
Public perception towards (true-sale and synthetic) securitisation and its
associated risks has largely been shaped by the high-profile defaults in the US
during the crisis, which have been taken as given for all subsegments and
regions.
However, the EU securitisation market in general was robust even
during the crisis, and defaults were significantly lower than in its US counterpart.
This has not changed materially. In 2015, the average structured finance default
rate in the US was 5.2% compared with only 0.7% in the EU , which shows that
concerns regarding market quality in Europe are overblown.
EU Forecast
euf:ba1.8i:165/nws-01