European securitization continues to expand at a torrid pace. During morning discussions at last week's Global ABS conference held in Barcelona, delegates got a mixed view as to the implications of such growth. While several top European bankers wondered aloud whether volatility was ahead, yet another respected buy-side chairman told the industry that there is plenty of incentive to carry on with the party.
The European market should issue an annualized 630 billion ($837 billion) in ABS, judging from the current run-rate and according to the European Securitization Forum. That would represent a 57.5% increase from the previous year, based on current numbers. The continent managed to do 400 billion in securitizations last year. Residential RMBS, which account for about 50% of overall issuance, and CDOs should continue to constitute the bulk of issuance, said Ralf Bauer, global head of structured credit at Fortis Bank.