MEPs of the European Parliament's Economic and Monetary Affairs Committee adopted on Tuesday 20 November the two draft reports prepared by Bernd Lucke (ECR, Germany) on the proposal to create a European label for covered bonds (see EUROPE 11979).
As a reminder, a covered bond is a debt issued by a credit institution and guaranteed by a separate cover pools for assets over which investors have a preferential right in the event of default by the issuer.
In the report on the directive, adopted by 34 votes to 16 with 1 abstention, MEPs introduce a major change from the original proposal by taking up the rapporteur's proposal to distinguish between ‘premium covered bonds’, which must meet higher criteria on the quality of assets specified in Article 129 of the prudential regulation “CRR", and the others - ‘ordinary covered bonds‘ - which do not meet these criteria (see EUROPE 12093).
Article 6 of the proposal, relating to eligible assets, has therefore been split in two, with a new Article 6a for ordinary covered bonds. As a result, a second European label for so-called 'premium' covered bonds should therefore be used.
The text also sets additional requirements for intra-group covered bond consolidation structures, specifies the conditions for including derivative contracts in the cover pool and makes the formulation of requirements on the homogeneity of the cover pool more flexible.
Regarding equivalence for third countries, MEPs decided to fix this possibility directly in the text, while the Commission had proposed to wait three years before considering the issue and considering a possible legislative initiative.
The text also calls on the European Commission to provide, two years after the entry into force of the Directive, studies and reports to Parliament to assess the risks posed by covered bonds with extendable maturities structures and on the possibility of introducing European secured notes.
It should be noted that the oral amendments and those put to the vote separately by the S&D group were all rejected. This included strengthening investor protection and tightening rules on the level of homogeneity of the assets in the cover pools. (Original version in French by Marion Fontana)