GlobalCapital welcomed an exclusive group of securitization issuers and investors for a private GC Live briefing in London that discussed how the UK RMBS market is changing now that many high-street banks and building societies have returned.

With cheap central bank funding schemes winding down, high-profile lenders like Lloyds and Nationwide are back in the prime RMBS sector to much acclaim. But there are questions around the extent of their impact and how the ripples will be felt across the market.

Will these prime issuers pave the way for a thriving and robust market? Is the question for treasurers now just which is tighter, RMBS or covered bonds? How has Nationwide’s ‘stock and drop’ innovation to speed up issuance changed things? Or will slow structuring and high legal costs mean securitization remains a mere diversification play?

There are plenty of wider implications. Once the prime RMBS shelves are back the next step could be more bank issuance in sectors like credit card and auto ABS. Issuers could turn to other currencies like dollar denominated RMBS which has been used heavily in the past.

The impact on specialist RMBS is also unclear. That market has struggled with rising interest rates and ever thinning margins. But there are some signs that with rates levelling, if not falling, that clouds are clearing. Lessons have certainly been learned from a treacherous period and there will be opportunities to come.

Lurking in the background is the long-awaited UK securitization regulation. Initially it seems tweaks, rather than sweeping reform is likely, but there is hope for a more nimble approach in future, working with the UK regulators, free of the straightjacket of primary legislation.