Was the size of the available asset pools in Europe a problem for securitisation?
Blomenkamp: Not necessarily. Naturally there were different structures in the U.S. and in Europe, especially when we think of the biggest segment, MBS, which are considered part of the ABS market in Europe. In Europe we have covered bonds. Many banks therefore have the option to finance themselves through covered bonds instead of MBS. This is not only the case for Germany with the “Pfandbriefe” but also other countries with similar covered bond products like Denmark. The U.K. has a large mortgage market as well but due to the lack of covered bonds banks make massive use of MBS to refinance themselves. Q: Were there European countries that introduced ABS ahead of others? Blomenkamp: The U.K. was a pioneer in the European ABS market, due to factors like its proximity to the U.S. in terms of language. We saw and still see MBS dominating the U.K. market because there is no common covered bond product available. The big mortgage banks therefore use the MBS market frequently, and issue sizes
