European Council Agrees Stance on EU Framework for Covered Bonds
European Council reached an agreement on the stance on a harmonized EU framework for covered bonds. The economic and financial affairs committee of the European Parliament voted on its draft report on November 20. The Parliament's stance is due to be confirmed by a plenary vote in December 2018.
The aim of the proposed framework (composed of a directive and a regulation), put forward by EC in March 2018, is to set minimum harmonization requirements that all covered bonds across Europe will have to meet. This will increase security for investors and open up new opportunities, in particular where markets are less developed. The proposed framework:
- Provides a common definition of covered bonds
- Defines the structural features of the instrument
- Defines the tasks and responsibilities for the supervision of covered bonds
- Sets out the rules allowing the use of the "European Covered Bonds" label
- Strengthens the conditions for granting preferential prudential treatment to covered bonds under the capital requirement regulation
The covered bonds market in the EU is developed. In December 2015, the outstanding volume of covered bonds issued by EU-based institutions reached EUR 2.1 trillion and constituted 84% of the total volume at the global level. Covered bond markets are particularly developed in Germany, Denmark, France, Spain, Italy, Luxembourg, and Sweden, as these countries have longstanding national regimes in place.
Related Links
- Press Release
- Compromise Text: Directive on Covered Bonds (PDF)
- Compromise Text: Regulation on Covered Bonds (PDF)
Keywords: Europe, EU, Banking, Securities, Covered Bonds, Capital Markets Union, European Council
Related Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
