Jumbo liquidity hit by a big freeze | Old product, new law | Investors force the paceWith no fanfare, no speeches, no toasts or celebratory dinners, the European Union has transformed the covered bond world.
On September 28, a plenary vote in the European Parliament led to the adoption of the Capital Requirements Directive (CRD), the EU’s draft legislation that will implement Basle II. At the time of writing, approval by the EcoFin Council of economics and finance ministers was expected imminently.
“This is the first time there’s been a European-wide piece of legislation for covered bonds,” says Paul O’Connor, head of prudential supervision and risk at the Irish Bankers Federation.
You could be forgiven for not having tracked this in detail. The CRD is a meaty directive. By the time of the plenary vote, MEPs had tabled and voted on some 887 amendments to it – a record. But its treatment...
