Buy side cautious on UK regulation drive

Following positive sell-side reaction to the joint review and consultation on UK covered bond regulation by the Financial Services Authority and HM Treasury, buy-side reaction has been more measured. Investors say transparency risks being diluted over time and the current legal status of covered bonds lacks clarity. But, combined with the European investor initiative, which may have repercussions on the ECB collateral framework, it is clear that all authorities are working in favour of investors and this can only be good.