The Financial Services Authority’s statement that it is ready to introduce a regulatory framework for UK covered bonds has met with widespread approval and relief from market participants [see FSA takes the covers off, February issue]. The announcement, made at the European Covered Bond Council’s meeting on February 7, ends a two-year period when UK borrowers operated at a disadvantage to many of their continental European competitors.
Good regulation
“We view the introduction of a covered bond regime that is compliant with EU legislation as consistent with our principles of good regulation,” says the FSA’s Paul Sharma, its head of prudential standards.
Consultations are due to be completed in the third quarter of 2006; the FSA will announce the final rules at the start of 2007.
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