Brussels, 01/02/2016 (Agence Europe) - At this stage, the European Commission is not convinced that there is a need for a harmonised market for covered bonds.
“It is not my aim for the prices of covered bonds to be the same throughout the European Union, or for there to be a single harmonised framework. I would rather build on the national covered bonds markets, which are doing the job well”, the Commissioner for Financial Services, Jonathan Hill, said in Brussels on Monday 1 February, at a conference hosted by the European Commission.
Covered bonds are bonds for which the servicing (payment of interest and repayment of the nominal) is covered by mortgage credits or credits on the public sector, for instance of local authorities.
Bonds of this kind finance 20% of mortgages in Europe and, in Denmark, mortgage loans are almost exclusively financed this way, Hill pointed out.
On the basis of the responses to the public consultation on covered bonds carried out in the framework of European work on the capital markets union, the Commissioner has taken the part of the stakeholders wishing to preserve the “diversity” of the financial products issue. “Many of the responses also called for minimum quality standards or principles to allow the discipline of the market and its effectiveness to be increased”, he observed. He added: “Increased consistency in the practices on the publication of information could help investors to get more out of covered bonds”. (Original version in French by Mathieu Bion)