Fitch details new criteria with liquidity centre stage

Fitch today (Wednesday) proposed changes to its assessment of liquidity risks within covered bond programmes, which would tighten the link between a covered bond rating and that of the issuer, to be expressed via higher Discontinuity Factors, and would also require higher overcollateralisation to be consistent with a given rating scenario. The proposed updates to the agency’s methodology come just over a month after Standard & Poor’s proposed changes to its covered bond rating criteria that have been widely criticised.