European Structured Finance Outlook 2022

DBRS Morningstar published its annual outlook for European structured finance. Looking ahead to 2022, as the pandemic-induced volatility continues to fade, there are a number of themes we expect the European securitisation market to face:
(1) Shift towards sustainable capital markets
-- ESG to remain in focus of investors, regulators, and other market participants
(2) Geopolitical risks
-- Brexit — a forgotten story — is still creating trade tensions for the UK with its immediate neighbours
-- Global trade tensions, migrant crises, trade wars, and supply chain issues are a few of the issues that can escalate into widespread market uncertainty
(3) Tightening of monetary policy
-- To curb inflation, transitory or persistently transitory inflation — whatever the naming convention — if central bank purchase programmes are tapered, we expect the balance of distributed versus retained issuances to tip slightly towards the former
-- In 2022, DBRS Morningstar forecasts total European securitisation issuance of EUR 200 billion to EUR 210 billion, out of which we expect EUR 110 billion to EUR 115 billion to be market-placed transactions. These forecasts are continuously dependent on the progress of measures to contain the virus and countermeasures used to keep inflation under control