BRRD supersedes cover pool in Scope’s covered bond rating approach

Scope Ratings has issued a request for comment on its approach to rating covered bonds, which takes special account of the Bank Recovery and Resolution Directive. This should mean strong banks can get a top covered bond rating without necessarily taking into account the cover pool, as recourse to the pool is considered “extremely remote.” And because the agency does not set a sovereign rating cap, peripheral issuers should be able to get a top covered bond rating.