Sovereign bond-backed securities: Risk diversification and reduction
As a part of the European regulatory responses to the financial and sovereign debt crises, the European Commission has proposed a regulation on sovereign bond-backed securities (SBBS), a new class of low-risk securities backed by a diversified pool of national government bonds. The proposal seeks to provide an enabling framework for a market-led development of SBBS, thus encouraging banks and investors to diversify their holdings of euro area bonds. The proposal is meant to address a weakness that appeared during the aforementioned crises, when banks' high exposure to their sovereigns' own debt, coupled with deteriorating creditworthiness of those sovereigns, led to balance sheet strains for banks. This in turn put pressure on government budgets, thus creating mutual contagion and financial instability. The procedure is currently at the initial stage in the European Parliament and the Council. First edition. The 'EU Legislation in Progress' briefings are updated at key stages throughout the legislative procedure.
Briefing
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Tipo de publicação
Autor
Palavra-chave
- Autoridade Europeia dos Valores Mobiliários e dos Mercados
- direito da União Europeia
- elaboração do direito da UE
- empréstimo público
- estabilidade financeira
- FINANÇAS
- finanças públicas e política orçamental
- instituições da União Europeia e função pública europeia
- livre circulação de capitais
- obrigação financeira
- proposta (UE)
- regulamentação financeira
- relações monetárias
- risco financeiro
- supervisão financeira
- UNIÃO EUROPEIA
- zona euro