Synthetic securitizations, known in the sector as 'synthetic risk transfers' (SRT), allow financial entities to free up regulatory capital by transferring to investors the risk of default on certain loan portfolios. However, their effect on the expansion of credit to companies, which in theory is their main purpose, is "too small to have a significant or substantial economic impact," according to an analysis released this Wednesday by the European Central Bank (ECB).
Economists Johanne Evrard, Wagner Eduardo Schuster, Fabian Wassmann and Michael Wedow remind us that, in theory, the securitization of bank loans should strengthen banks' financing capacity and support economic growth. However, the work focused on the European synthetic securitization market concludes that these operations, taken in isolation, will hardly be sufficient to appreciably raise credit to the real economy.
In quantitative terms, the report states that the European securitization market has experienced a "moderate recovery" in recent years, driven mainly by synthetic operations —in which the entity keeps the loans on balance but transfers the credit risk to investors— whose volume has nearly tripled since 2021.
In contrast, the size of traditional securitizations —those in which the loans are removed from the bank's balance sheet— has barely changed during this period.
Thus, by the end of 2025, the outstanding value of synthetic securitizations backed by loans to SMEs was around 480 billion euros, compared to about 380 billion euros in the case of traditional securitizations.
In theory, the release of capital derived from these structures should allow banks to allocate it to new loans with higher profitability, thus optimizing the composition of their balance sheet. However, the analysis emphasizes that, in practice, entities are largely opting to return that capital to their shareholders.
ONLY 0.02% MORE CREDIT FOR EVERY 1% MORE SECURITIZATIONS
Although the raw figures indicate that, between 2018 and 2025, the average growth of credit to companies from banks that resorted to securitizations was around 5%, compared to approximately 1% from entities that did not use them, the ECB warns that this simple comparison does not incorporate other elements that influence the evolution of financing, such as the size of the banks, their level of capitalization, or the macroeconomic context.
For this reason, the agency has tried to isolate the specific impact of synthetic securitizations on the variation of business loans, controlling for the other factors. With this approach, experts from the central bank estimate that a 1% increase in the issuance of synthetic securitizations is associated with an increase of around 0.02% in the growth of corporate loans.
"By itself, synthetic securitization will likely not allow banks to increase credit to the real economy in substantial amounts, and certainly not at the scale necessary to boost the European economy, much less to cover the annual investment gap of between 750 billion and 800 billion euros identified in the Draghi report," the authors attest.
A THREE TIMES GREATER EFFECT IN FAVOR OF DIVIDENDS
At the same time, the ECB observes that the effect of synthetic securitizations on dividend payments is three times greater than the impact detected on corporate credit: for every 1% increase in the issuance of these operations, dividends rise by 0.07%, compared to 0.02% for loans to companies.
In this scenario, and in light of the gap between both effects, entities would be using securitizations to operate with a more efficient capital structure and reinforce shareholder remuneration, something that can be key to sustaining investor confidence in a competitive environment.
The conclusions fit with the trajectory of the business in Spain. Santander, one of the largest European issuers of SRT, expects to maintain between 2026 and 2028 an ordinary shareholder remuneration policy equivalent to approximately 50% of the group's ordinary profit.
BBVA, for its part, has also intensified its presence in this segment. In March 2026, the entity completed a synthetic securitization of 4.5 billion euros on a portfolio of corporate loans, the largest operation of this type it has carried out so far, with which it managed to free up nearly 80% of the initial regulatory capital associated with that portfolio. All this while maintaining its commitment to distribute each year between 40% and 50% of the consolidated ordinary profit of each financial year.
However, the study warns that allocating the freed capital to shareholder remuneration may increase the leverage of banks and diminish their capacity to absorb future disturbances.
RISKS TO FINANCIAL STABILITY
At the same time, the central bank identifies additional risks linked to synthetic securitizations. "When banks reuse the capital freed up through synthetic securitization, they become less capitalized and reduce their efforts to supervise borrowers. It can also create closer ties between non-bank financial entities, which increases the risk that tension situations spread throughout the financial system," argue the authors of the report.
Therefore, although securitization can help alleviate credit constraints in phases of economic normality, the work warns that it could also "worsen financing conditions during a recession or crisis."
INTEGRATING CAPITAL MARKETS TO INCREASE FINANCING
With the aim of reaching 800 billion euros annually in investment as advocated by Draghi, the institution believes that the securitization market could gain traction if the demand for these instruments increases and an effective transfer of risk outside the banking sector is facilitated.
However, the ECB expects that the review of the European prudential framework on securitizations should not focus solely on lowering the capital requirements associated with these products.
In this regard, specialists emphasize that, to protect financial stability, capital markets and equity investors may be better positioned to finance "new and risky" projects, while bank credit should be primarily directed towards the real estate sector, which contributes "only marginally to productivity growth."
For this reason, the euro monetary authority considers it "especially important" to deepen and connect the capital markets, particularly those of equity, as a way to advance the goal of securing that volume of investment.