Cuts to securitisation capital charges too small, say experts

But European Commission proposals can stop insurers becoming forced sellers of low-risk securitisations

European commission

Plans to reduce capital charges on low-risk asset-backed securities (ABS) are too limited to attract continued investment from European insurers after Solvency II implementation, experts say.

The European Commission is proposing to halve the capital charges for so-called 'type 1' securitisations under the standard formula, moving away from recommendations made by the European Insurance and Occupational Pensions Authority (Eiopa).

According to sources familiar with the draft version of the Solven

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