Market highlights and commentary According to Eurostat, GDP rose by 0.3% quarter-overquarter (QoQ) in the EU 19 and the EU 28 for the fourth quarter of 2015, unchanged (EU 19) or down slightly (0.4%, EU 28) from the prior quarter. Term Issuance and Outstanding VolumesIn Q4 2015, EUR 71.4 billion of securitised product was issued in Europe, an increase of 25.0% from Q3 2015 (EUR 57.1 billion) and an increase of 19.3% from Q4 2014 (EUR 59.8 billion). Of the EUR 71.4 billion issued, EUR 15.5 billion was placed, representing 21.7% of issuance, compared to EUR 18.1 billion placed in Q3 2015 (representing 31.8%) and EUR 24.3 billion placed in Q4 2014 (representing 40.6%). For the full year, EUR 213.7 billion of securitisations were issued in Europe, a decline of 1.5% from the prior year. Of this, EUR 81.5 billion were placed, representing 38.1% of totals, an improvement from the EUR 78.2 billion (36.0%) of securitisations placed in 2014. For the fourth quarter, UK RMBS continued to lead placed totals (EUR 6.1 billion), followed by European CLOs (EUR 3.5 billion) and German auto ABS (EUR 1.6 billion). For the full year, placed issuance broadly reflected the same trends, with UK RMBS leading placed totals (EUR 20.1 billion), followed by PanEuropean CLOs (EUR 13.7 billion), and German auto ABS (EUR 11.4 billion). Net issuance of securitised product remained negative, with EUR 1.25 trillion outstanding at the end of 4Q’15, down from EUR 1.33 trillion at the end of 3Q’15. Of this, EUR 690.4 billion, or 55.4%, were retained.

Highlights Equity underwriting in European exchanges accumulated in 2015 a total of € 201.5 bn in proceeds, an increase of 16.7% from the value observed in 2014 (€ 172.7 bn). Equity underwriting encompasses Initial Public Offerings (IPOs), convertible securities and follow-on offerings. Mergers and Acquisitions (M&A) between European companies (as acquiring and target companies) totalled € 396.9 bn in 2015, an increase of 11.9% from the value observed in 2014 (€354.6 bn). Equity trading activity in European exchanges and MTFs accumulated in 2015 a total of € 13.1 tn in turnover value, an increase of 28.7% from the value observed in 2014 (€ 10.2 tn). Market capitalisation of European shares stood at € 11.9 tn at the end of 2015, an increase of 15% in Euros from the value observed in December 2014 (€ 10.7 tn).

Preface The legislative cycle after the 2014 European elections should be focused on long-term growth. As the new EuropeanCommissioners and MEPs look forward to the next five years, they have a key task – to introduce legislation that promotessustainable economic growth in Europe, so reducing unemployment and debt through improving the structure of the pan-European economy. Substantial progress has been made in establishing a framework of financial regulation that reduces the risk of the bankingsystem endangering the economy again. As that framework moves from legislation to implementation, it is time to focus onaddressing the growth agenda. The European Commission acknowledges in its ‘roadmap to meet the long-term financing needs of the European economy’,1that the funding model needs to be improved. Europe is too reliant on its banks for funding and needs to develop its capitalmarkets in order to improve the availability and cost of finance. As the Commission says,if long-term growth is to be improved, then companies need better access to large andliquid capital markets. This paper highlights the potential for high-quality securitisation in Europe to play apart in unlocking jobs and growth. Yet for it to do so, the proposed regulatory frameworkneeds to be sensibly calibrated – recognising risk, but also taking into account the strongperformance of high-quality securitisation in Europe over the past few years. We welcome the support of central banks and policymakers in calling for a revival ofhigh-quality securitisation, and stating that a revived and sustainable securitisationmarket would contribute to lower cost of capital, higher economic growth and a broaderdistribution of risk. In our view, there is an urgent need for coordinated action to revive securitisation. It would be a first step in helping Europe’sbanks fund their customers more efficiently. It would broaden the range of tools available to help them manage and transferrisk. And it would also help rebalance Europe’s financial system by widening and deepening its capital markets. Simon LewisChief Executive, Association for Financial Markets in Europe 1. Commission roadmap to meet the long-term financing needs of the European Economy, 27 March 2014