The covered bond business is not the most exciting in the capital markets but virtually every investment bank is currently striving to enter or re-enter it. Why?
It is not as if good money can be made trading. The only reason why issuers pay fees is because of onerous market-making commitments. A covered bond trading desk that even manages to break even is a good one. Making profits of €1 million to €2 million is the best the leading banks can hope for.
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