{"id":191124,"date":"2025-06-17T07:46:09","date_gmt":"2025-06-17T07:46:09","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/191124\/"},"modified":"2025-06-17T07:46:09","modified_gmt":"2025-06-17T07:46:09","slug":"eu-resurrects-banking-practice-that-caused-the-2008-financial-crisis-politico","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/191124\/","title":{"rendered":"EU resurrects banking practice that caused the 2008 financial crisis \u2013 POLITICO"},"content":{"rendered":"<p>In the pre-2008 lending boom, American banks sold their dodgiest &#8220;subprime&#8221; loans to investors around the world. When the U.S. housing bubble burst and borrowers defaulted en masse, a global financial crisis ensued.<\/p>\n<p>Brussels now<strong> <\/strong>wants to loosen the rules governing the practice, meaning banks would need to put aside less capital against the loans they trade, as well as easing due diligence and reporting rules around the practice. But the Commission insists enough safeguards will remain to protect against a repeat of 2008.<\/p>\n<p>Pint-sized market<\/p>\n<p>The European market is pint-sized compared with others globally: It shrank from being worth around \u20ac2 trillion at its precrisis peak to \u20ac1.2 trillion now. The U.S. market has grown from being worth $11.3 trillion (\u20ac9.76 trillion) in 2008 to $13.7 trillion (\u20ac11.83 trillion) now \u2014 leading senior officials at the Commission to <a href=\"https:\/\/finance.ec.europa.eu\/news\/eu-securitisation-market-2025-04-16_en#:~:text=The%20credit%20performance%20of%20European,senior%20tranches%20have%20suffered%20loss.\" target=\"_blank\" rel=\"noopener\">call securitization<\/a> an \u201cunderexploited tool in Europe.\u201d<\/p>\n<p>Buzzy political reports from figures like former Italian prime ministers Enrico Letta and <a href=\"https:\/\/commission.europa.eu\/document\/download\/97e481fd-2dc3-412d-be4c-f152a8232961_en?filename=The%20future%20of%20European%20competitiveness%20_%20A%20competitiveness%20strategy%20for%20Europe.pdf\" data-type=\"link\" data-id=\"https:\/\/commission.europa.eu\/document\/download\/97e481fd-2dc3-412d-be4c-f152a8232961_en?filename=The%20future%20of%20European%20competitiveness%20_%20A%20competitiveness%20strategy%20for%20Europe.pdf\" target=\"_blank\" rel=\"noopener\">Mario Draghi<\/a> on how to boost the bloc\u2019s ailing economy called for a revival of securitization in the EU to boost bank lending to businesses. The push on securitization forms part of the Commission\u2019s wider plan to stimulate an <a href=\"https:\/\/www.politico.eu\/article\/eu-markets-economic-growth-competitiveness-savings-and-investments-union-siu\/\" target=\"_blank\" rel=\"noopener\">investment culture<\/a> in the bloc and turn around its sputtering economic growth.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"683\" src=\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/06\/13043061-1024x683.jpg\" alt=\"\" class=\"wp-image-6761544\"  \/>Buzzy political reports from figures like former Italian prime minister Mario Draghi on how to boost the bloc\u2019s ailing economy called for a revival of securitization in the EU to boost bank lending to businesses. | Paulo Novais\/EFE via EPA<\/p>\n<p>Governments including in France and Germany have <a href=\"https:\/\/pro.politico.eu\/news\/196338\" target=\"_blank\" rel=\"noopener\">lobbied heavily<\/a> to see the rules loosened as this would boost their banking sectors, while finance ministers and heads of government all <a href=\"https:\/\/finance.ec.europa.eu\/document\/download\/fb451cdc-4e5b-4d74-9411-cb8bd0789090_en?filename=2024-eu-securitisation-framework-consultation-document_en.pdf\" data-type=\"link\" data-id=\"https:\/\/finance.ec.europa.eu\/document\/download\/fb451cdc-4e5b-4d74-9411-cb8bd0789090_en?filename=2024-eu-securitisation-framework-consultation-document_en.pdf\" target=\"_blank\" rel=\"noopener\">called on<\/a> the Commission to revive the market \u2014 making it a <a href=\"https:\/\/commission.europa.eu\/document\/download\/e6cd4328-673c-4e7a-8683-f63ffb2cf648_en?filename=Political%20Guidelines%202024-2029_EN.pdf\" data-type=\"link\" data-id=\"https:\/\/commission.europa.eu\/document\/download\/e6cd4328-673c-4e7a-8683-f63ffb2cf648_en?filename=Political%20Guidelines%202024-2029_EN.pdf\" target=\"_blank\" rel=\"noopener\">political priority<\/a> for Commission President Ursula von der Leyen when she was reelected last year.<\/p>\n<p>Banks will be thrilled to see a revival of the practice in Europe \u2014 not least because holding less capital against the risk of securitizations will give them more cash to play with.<\/p>\n","protected":false},"excerpt":{"rendered":"In the pre-2008 lending boom, American banks sold their dodgiest &#8220;subprime&#8221; loans to investors around the world. When&hellip;\n","protected":false},"author":2,"featured_media":191125,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3090],"tags":[3427,331,51,6659,2766,2825,53958,1700,474,36,1824,1195,806,1197,2441,9899,2444,54158,413,16,15,49],"class_list":{"0":"post-191124","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-banking","9":"tag-banks","10":"tag-business","11":"tag-crisis","12":"tag-culture","13":"tag-debt","14":"tag-due-diligence","15":"tag-economy","16":"tag-finance","17":"tag-france","18":"tag-germany","19":"tag-growth","20":"tag-industry","21":"tag-investment","22":"tag-markets","23":"tag-ngos","24":"tag-regulatory","25":"tag-securitization","26":"tag-space","27":"tag-uk","28":"tag-united-kingdom","29":"tag-united-states"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/191124","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=191124"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/191124\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/191125"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=191124"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=191124"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=191124"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}