The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Pfandbriefe market: Can a jumbo give birth to a baby?

Optimists believe the new market in jumbo Pfandbriefe could become sophisticated, liquid and efficient enough to be regarded as a kind of baby Bund. Pessimists think overcoming image problems in the eyes of international investors will prove too difficult. Philip Moore reports.

At a recent get-together of Munich's city bankers, Bayerische Handelsbank board member and new president of the Association of German Mortgage Banks Walter Dieck fell into conversation with a professor of economics at the University of Munich - a specialist in banking - about Germany's new "jumbo" Pfandbrief market which combines issuing activity into offerings of Dm500 million or more, and promises market-making. The market's profile is improving, they agreed. After all, remarked the professor, Pfandbrief had an accepted English translation - "mortgage bond". Dieck smiles ironically when he recalls the depth of misunderstanding even at the very nerve centre of the Pfandbrief market's development. As Stephan Bub, treasury head at Bayerische Vereinsbank, says: "The idea of the jumbo Pfandbrief was born in Munich. The launch of the product demanded a highly concerted effort by the three big Munich banks."

Just how wildly misleading the translation "mortgage bond" has become is revealed by an analysis of the first six months of the jumbo Pfandbrief market. Between May or June 1995, when the first jumbo was issued by Frankfurter Hypothekenbank or Bayerische Vereinsbank (definitions differ) and the end of November, 31 Pfandbrief issues - with an average issue size of Dm1.285

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree