The European Commission and European Investment Bank plans to stimulate SME lending via securitization could be ready in January 2014, according to report published this week by the Economic and Financial Affairs Council.
The report said that the Commission is considering supporting SME ABS issuance backed by portfolios of new and existing loans, among other possibilities.
Three options are currently being considered for the design of the new SME instrument. The first option calls for a joint guarantee instrument (potentially combined with a joint securitization instrument) for portfolios of new SME loans.
Another option is a joint securitization instrument allowing for the securitization of portfolios of both new and existing SME loans.
The third option that is being looked at calls for a joint securitization instrument allowing for the securitization of portfolios of both new and existing SME loans with the pooling of resources and risks.
All three options require changes to a draft regulation on common provisions applicable for the EU's structural and investment funds for the 2014-20 period, for which negotiations with the European Parliament are near conclusion. “The timetable for the programming of national allocations from the funds is therefore tight,” said the Economic and Financial Affairs Council.