EU Commission announces legislative initiative for covered bonds

The Association of German Pfandbrief Banks (vdp) welcomes the plans for the European Commission’s legislative initiative on the harmonization of covered bonds. Within the scope of its newly published mid-term review of the capital markets union action plan, the EU Commission on June 8 announced a legislative initiative for the first quarter of 2018, the aim of which is to make the European covered bond market more homogeneous and more transparent.

“Uniformly high quality standards are likely to give a further boost in the perception of investors to what has proven itself to be a crisis-resistant asset class. At the same time we consider harmonization to be a key cornerstone for maintaining preferential regulatory treatment in international financial market regulation over the long term,” said Jens Tolckmitt, Chief Executive of the vdp.

“The vdp has lent its active and well-disposed support to the project from the outset, and with regard to its concrete design advocates in particular that the envisaged harmonization should remain principle-based and so continue to provide scope for the national systems to develop further in terms of their quality,” Tolckmitt remarked.