The growth of asset-backed securities in Europe

Asset-backed securities (ABS) are seeing a strong growth trend not only in the U.S., but also in Europe. According to data from the Association for Financial Markets in Europe (AFME) and Morningstar DBRS, the European securitization market has shown significant growth and recovery in 2025. Total European securitization issuance reached nearly 49 billion euros in Q3 2025, with ABS issuance this year also hitting levels not seen since before the 2008 financial crisis.

The European securitization market continues to evolve, demonstrating resilience and adaptability in the face of regulatory developments, technological advancements and shifting investor expectations. Its current growth reflects a marketplace shaped by robust demand, new asset classes, rising transparency requirements and a growing focus on sustainability and innovation.

In this article, we’ll explore the changing European ABS regulatory and reporting landscape, the impact of environmental, social and governance (ESG) investing and new asset classes, and an outlook for what could lie ahead.

Navigating a shifting regulatory landscape

The world of asset-backed securities is shifting quickly, and regulatory change is at the heart of the story.

After the 2008 financial crisis, regulators implemented reforms like Reg AB II in the U.S. to enhance transparency and improve investor access to information about the underlying assets in ABS transactions. In 2019, the EU introduced its own regulatory framework to improve transparency, robustness and market confidence, with ongoing proposals for further streamlining and coordination.

Across major global markets, new rules continue to arrive from both local and international bodies. Ongoing adjustments – whether from the EU, the UK or wider frameworks like Basel 3.1 and Solvency II – point to a market that’s determined to build trust and transparency. Stricter data requirements and standardized reporting formats are making it easier for investors to analyze deals and compare opportunities across borders.

Transparency and technology

New regulations require detailed asset-level data for most ABS categories, providing investors with greater insight into the characteristics and performance of the underlying loans. Regulators are promoting standardized, machine-readable data formats (like XML) to facilitate analysis and comparison of ABS transactions. Proposed changes aim to simplify due diligence requirements for EU securitizations by reducing the burden on investors to verify certain information when dealing with supervised EU entities.

Technology is also making a quiet but profound impact across the market. Automation tools are streamlining reporting and compliance, reducing manual workloads and mitigating operational risk.

“Recent regulatory and technology developments, including sharpened definitions of ‘public’ securitizations and tougher due diligence rules, reflect the drive to make the market safer and more appealing for a broad range of investors,” says Joshua Theodore, vice president of business development for U.S. Bank Global Corporate Trust. “While these measures set a strong foundation for growth, they also raise new compliance challenges, particularly for market participants managing complex or high-profile transactions.”

ESG takes center stage

Beyond regulation, ESG investing is rapidly becoming a defining theme in the ABS landscape. Investors increasingly expect detailed insight into the environmental, social and governance credentials of the assets they fund. This shift is encouraging issuers to standardize and enhance their reporting practices, with trade associations and regulatory bodies setting the stage for best practices in consistent ESG disclosure.

The market is still on a journey – drawing together meaningful, comparable ESG data across asset classes remains a challenge. But progress is unmistakable: more green and sustainability-linked ABS deals are appearing, and frameworks are evolving to ensure ESG becomes routine rather than exceptional in securitization.

Evolving asset classes and market dynamics

Change isn’t limited to infrastructure and process – what counts as “mainstream” in ABS is shifting as well. Different types of asset-backed securities like electric vehicle loans, solar financing and equity-release mortgages are moving from niche status to market staples thanks to standardization and accessible pricing.

“From our perspective, digital infrastructure and data center financing are picking up pace, and fund finance transactions are now tapping securitization for efficient capital,” says Joshua. “Each new asset class brings questions about risk and disclosure, but also adds resilience and depth to the market.”

With growth, there are new pressures. Compliance costs are up, and balancing transparency with data privacy is an ongoing challenge. Market fundamentals – like interest rate moves and shifting economic sentiment – remain front and center for everyone.

Accommodating evolving reporting requirements

Implementing and complying with evolving requirements can be complex and burdensome for market participants. But working with an experienced corporate trust provider relieves much of that burden.

Because of the enhanced regulatory landscape, reporting is now more important than ever. The right team can provide a steady hand of guidance and help ensure all aspects of a transaction are being handled to the highest standards of quality and compliance.

“Working with an established party in the market, with strong experience on complex transactions, can make a significant difference on how the transaction is executed, funded and run between the originator and investors,” says Joshua.

With complex deals with multiple parties involved, communication is critical. It requires a high level of expertise to capture the right data for investor reporting purposes.

“You have to be extremely rigorous, so you don’t miss any data that impacts delivering investor reports on time,” says Joshua. “Deal timing can move quickly, and our ability to meet those compressed deadlines, to be nimble and to bring extensive experience for our clients is something that sets us apart.”

Recently, our corporate trust team at U.S. Bank took on two new ABS clients – in the data storage and wine & spirits sectors – that needed comprehensive reporting to align with transparency requirements. Both deals represented new asset classes in Europe, and they highlight the potential liquidity for similar companies in the market and for investors considering alternative investment opportunities. The U.S. Bank team served in multiple roles on the transactions, including security trustee, paying agent, account bank, facility agent and cash manager.

“We’re often complimented on our pragmatic and commercial approach to deals – and on our ability to onboard clients efficiently and guide them through the complexity of investor reporting needs,” says Joshua. “Our arranger clients have brought us into transactions knowing we can execute for their corporate originator clients, and we have a strong reputation in the market for successfully managing challenging operational transactions.”

Looking ahead: Optimism rooted in adaptation

Even as the landscape grows more complex, there’s a strong sense of optimism. The market is adapting quickly, with participants embracing technology, building out ESG strategies and rising to meet a renewed regulatory focus. Adaptability and accountability are now hallmarks of leadership in ABS.

Ultimately, the asset-backed securities market continues to prove its resilience – clear-eyed about its challenges, yet forward-looking and energetic as it strives for greater transparency, inclusion and value for investors. With an ongoing commitment to authentic partnership, innovation and high standards, market participants are boldly shaping the future of securitization.

At U.S. Bank, we have the experience, reach and technology to navigate the mechanics of complex deals with transparency, consistency and unwavering quality. As new opportunities emerge in the European ABS landscape, we can help you understand some of the new legal and structural hurdles in this fast-paced market.

To learn more about our European trustee services, contact us.