While the European primary pipeline remains quiet, securitization activity for Central Bank repo funding is growing. 

Fitch Ratings said that it's led to a trend towards much larger transaction sizes. Fitch estimated that the average European structured finance transaction size in 2008 (excluding CDOs) was €2.6 billion ($3.5 billion) in 2008, compared to €1.7 billion in 2007, an increase of some 52%.

Fitch also said that banks are also increasingly looking to the remaining assets in their back books — assets which have often been passed over for securitization in the past.

"Banks are turning to assets that they chose not to securitize previously, when investors were still buying, because alternative funding sources were available and there was a strong flow of newly originated more 'plain vanilla' assets to securitize," said Stuart Jennings, structured finance risk officer for the EMEA region. "Banks may have preferred not to tap such portfolios in the past as either they saw limited investor appetite for the profile of the assets, or they may have deemed them too problematic or costly to securitize in terms of limited data availability, legal concerns, systems issues or enhancement levels."

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