Securitisation as a Toolbox
”SME Loan Securitisation - An important tool to support European SME lending
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Securitisation per se is not good or bad - it is a toolbox, an instrument, a technique. As such it is value-free; but its aggressive, opaque, and overly complex use has negative consequences for ultimately both issuers as well as investors. Negative repercussions are however also created by an overly simplified discussion where everything related to structured finance is lumped together and dismissed or branded as “toxic”, as sometimes stated in the press.
The instrument is neither “toxic” nor is the underlying asset (SME loans!) “toxic waste”. On the contrary – loans to SMEs are a key driver for the functioning of the economy and, properly applied, the securitisation technique is a replicable tool that can enhance access to finance for SMEs.
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European Investment Fund (EIF) Working Paper 2010/007, October 2010
