Pfandbrief banks welcome successful conclusion of the trialogue negotiations on the harmonization of covered bonds

The Pfandbrief banks welcome the political agreement reached between European Council, European Commission and European Parliament in the trialogue on the harmonization of covered bonds in the European Union. With that, the harmonization process has cleared an important hurdle and is now close to its successful conclusion.

“The agreement is proof of the ability of the Member States and institutions in the European Union to act. This is a major building block in completing the capital markets union and is the foundation of the permanent privileged treatment of covered bonds,” said Jens Tolckmitt, Chief Executive Officer of the Association of German Pfandbrief Banks (vdp) in Berlin.

“All the parties involved showed a strong willingness to compromise. The formulas that were found are by all accounts well balanced, continue to be strongly principles-based, and clearly bear the stamp of the Pfandbrief Act. Even though it will be a few days until the details of the agreement materialize, it is now assured that the dossier in Brussels will be closed during the current legislative period,” Jens Tolckmitt commented.


Work on the fine details of the wording is to be concluded by the middle of March, and the final adoption of the legislative package by the EP plenary is scheduled for between the end of March and the middle of April at the latest.

Covered bonds are already an important funding instrument in most Member States, whereas they are less well known in several countries of the EU. Thanks to the agreement that has now been arrived at, the EU will have a framework that provides strong incentives to use these products throughout Europe.