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.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Pfandbrief: After 200 years, it’s come to this

The inclusion of the Pfandbrief in the German government’s banking guarantee marks a turning point – not just in the financial downturn but in the product’s entire history. Jethro Wookey reports.

European government guarantee packages: Guaranteed to confuse

The sincerest form of flattery

IT IS COMMONLY impressed on investors that in more than 200 years of existence, the German Pfandbrief, the benchmark of the modern covered bond world, has never experienced a single case of default. This is not just a fact that is trotted out for marketing purposes in the same way that, say, a hedge fund might boast that none of its investments had lost money. The Pfandbrief’s perfect record is, rather than merely an affirmation of its strict safety regulations, an integral part of its make-up. Protection from default is not so much a priority as a purpose. Measures to safeguard the Pfandbrief holders of an insolvent issuer are comprehensive, and as a result there has never been a case of failure. There has also never, in more than 200 years, been a case of the German government having to reassure the market that it is ready to step in and aid the Pfandbrief if the need arises, simply because that need was never foreseen. Until now.

On October 13, the German government introduced a draft bill for the financial market stabilization act, in which it made particular reference to the Pfandbrief.

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