On Thursday 18 October, the MEPs of the committee on economic and monetary affairs of the EP reviewed the amendments tabled to the two draft projects by Bernd Lucke (ECR, Germany) on the proposal to create a European label for covered bonds (see EUROPE 11979).
Although the rapporteur considers that the negotiations were going well, he identified three points on which the political groups will need to overcome their differences of opinion rapidly.
Firstly, there is no agreement on assets eligible for superior-quality and ordinary-quality covered bonds (see EUROPE 12093). The S&D group in particular feels that the composition of the separate basket of hedging assets that guarantees the bond is too limited. Conversely, the ALDE group attempted to limit it still further through its amendments, in order to preserve the quality of the covered bonds.
The treatment of derivatives contracts and the inclusion of these in the framework of risk coverage have also still to be resolved.
However, the most controversial matter continues to be the inclusion of extendable maturities. The rapporteur called upon his colleagues to “reconsider their negative attitude” towards his proposal to gradually scale up the risk weighting for covered bonds whose maturity can be extended by more than one year.
There are only a few weeks left for the political groups to get onto the same page before the vote in committee, scheduled for 5 November. (Original version in French by Marion Fontana)