European RMBS is expected to continue generating strong issuance volumes, more structural innovations and a number of new market entrants this year, said Fitch Ratings. The U.K. market will again lead the way with a growing number of transactions as well as inventive structures. New RMBS issuers are also expected to enter the U.K. non-conforming sector . "Continued healthy European RMBS growth is expected despite up-ticks in arrears in some countries and potential challenges to the sector with Basel II implementation on the horizon," said Stuart Jennings, managing director in Fitch's European RMBS team ."Despite the availability of covered bonds as an alternative funding source of mortgage funding, continued tight RMBS pricing maintains its attraction as a funding source."

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