Strasbourg Approves the Covered Bond Legislative Package: a Milestone for the Future of the Industry and the Capital Markets Union

Following the trilogue negotiations with the Council and the European Commission on the proposal for a Covered Bond Legislative Package, the European Parliament’s Plenary adopted today in Strasbourg the text which had been approved by the Council (Coreper) on 20 March and then by the European Parliament’s Economic and Monetary Affairs (ECON) Committee on 1 April 2019.

In this context, the European Mortgage Federation - European Covered Bond Council (EMF-ECBC ) welcomes the adoption of the Covered Bond Legislative Package, which aims at completing the Capital Markets Union (CMU) in Europe.

The Package provides a basis for enhanced harmonisation of the European covered bond market, in line with the objectives of the CMU, reinforcing a European common qualitative benchmark for international investors and respecting well-functioning traditional markets. It moreover paves the way for the smooth introduction of this asset class in newer and emerging covered bond markets in the Union, such as those in the Baltic regions, Poland, Slovakia and Romania, and will also serve as an important legislative benchmark on a global level for countries such as Australia, Brazil, Canada, Japan and Singapore.

This significant achievement comes just a few days ahead of the 29th ECBC Plenary meeting in Riga, Latvia on 24 April 2019  where the entire community will gather together to celebrate this historic moment for the asset class and discuss how to align market best practices to the new legislative framework.

Commenting on the adoption of the Legislative Package, Luca Bertalot, EMF-ECBC Secretary General stated:

“We are extremely pleased with today’s outcome which is the result of a long and intense period of discussion and negotiation between policymakers, during which the EMF-ECBC played a pivotal role in facilitating constructive dialogue between the industry and the EU Institutions. The agreement sealed today delivers a common European-wide regulatory framework for covered bonds which not only enhances harmonisation of best practice but also contributes to the further development of covered bonds in the EU and beyond, acting as a lighthouse for the global funding of the real economy and further reducing market fragmentation. The industry is very proud of this accomplishment which is the result of a combined effort of all market stakeholders to secure a global qualitative benchmark which responds to the needs of the market. The EMF – ECBC will now follow closely national implementation of the Legislative Package and, as always, stands ready to assist the development of the asset class in new jurisdictions, such as in the Baltic region, and other global markets”.

Notes to the Editor:

1. Established in 1967, the European Mortgage Federation (EMF) is the voice of the European mortgage industry, representing the interests of mortgage lenders and covered bond issuers at European level. The EMF provides data and information on European mortgage markets, which were worth around 7 trillion EUR at the end of 2017. As of April 2019, the EMF has 16 members across 13 EU Member States as well as a number of observer members.

2. In 2004 the EMF founded the European Covered Bond Council (ECBC), a platform bringing together covered bond issuers, analysts, investment bankers, rating agencies and a wide range of interested stakeholders. As of April 2019, the ECBC has 121 members across more than 30 active covered bond jurisdictions and many different market segments. ECBC members represent over 95% of covered bonds outstanding, which were worth nearly EUR 2.5 tn at the end of 2017

3. The Covered Bond Label Foundation (CBLF) was established in 2012 by the European Mortgage Federation –European Covered Bond Council (EMF-ECBC). The Covered Bond Label website became fully operational on the 1^st of January 2013, with the first Labels being effective since then. The website features the Harmonised Transparency Template (HTT) and 14 National Transparency Templates, published by 106 issuers disclosing information on 125 labelled cover pools across 18 jurisdictions. The Covered Bond Label website currently provides issuance data on 5,000 covered bonds, amounting to a total face value of over 1.6 trillion EUR, out of which over 2,800 covered bonds already include information on the Liquidity Coverage Requirement (LCR).

4. For the latest updates from the EMF-ECBC, follow us on Twitter, LinkedIn and YouTube or visit the EMF-ECBC website.

European Mortgage Federation, Rue de la Science 14A, 2nd Floor T. +32 2 285 40 30 www.hypo.org
European Covered Bond Council, B-1040 Brussels – Belgium info@hypo.org

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Contact information

European Mortgage Federation
Luca Bertalot
Secretary General
Tel: +32 2 285 40 35
lbertalot@hypo.org