With much being made of the split between "core" and "non-core" covered bond markets, and that between legislated and structured issues, it is a comforting thought that the European covered bond community is for once in harmonious agreement.
Unfortunately, the extent of that agreement is that something needs to be done, rather than what that something might be. Last month in Milan, the European Covered Bond Council met to discuss possible solutions to the problems in inter-dealer market making. One of the key selling points of covered bonds is the stringent market-making commitment to which underwriters commit themselves.
But volatility in the wider financial markets as well as specifically in covered bonds, culminating in the pulling of a three-year deal from AIB Mortgage Bank last November, caused...
