Despite the relentless commentary of covered bond participants on the relative benefits of their product in times of financial stress, severe difficulties continue to hamper the market-making process, and the secondary market remains in virtual paralysis. Various measures implemented by such bodies as the European Covered Bond Council (ECBC) since the credit crunch, such as the tripling of bid-offer spreads and the splitting of the market into core and non-core jurisdictions, have not had the desired effect of reinvigorating the stalled market. Although some issues have enjoyed small measures of success in the primary market, most notably those from German Pfandbrief issuers, the market remains illiquid and trading...
