The Cover Pool Monitor of a Pfandbrief Bank

Duties – Powers – Limits

“Old laws are good laws.” With these words begins the preface to the collection of articles commemorating the 100th anniversary of the German Mortgage Bank Act, published in 1999 by the vdp’s predecessor organization, the Association of German Mortgage Banks (VDH). This old law codified, in July 1899, the institution of the cover pool monitor, which with regard to the cover pool monitor’s main duties remained largely unchanged when the Mortgage Bank Act was converted into the Pfandbrief Act in May 2005. To this day, one cover pool monitor (and at least one deputy) must be appointed at every Pfandbrief bank (§ 7 par. 1 Pfandbrief Act).

Taking a purely systematic view of the two laws, one might even conclude that the role of cover pool monitor has gained in importance given that the relevant provisions of § 29 ff of the Mortgage Bank Act have now been placed more prominently towards the beginning of the Pfandbrief Act, as § 7 ff Pfandbrief Act. Yet a break with the tradition that dates back to 1899 would be anything but appropriate: today, the cover pool monitor increasingly per-forms tasks which serve only one purpose, namely to safeguard the quality of the German Pfandbrief.