NSFR does not help covered bonds

The Net Stable Funding Ratio (NSFR) proposed by the Basel Committee on Banking Supervision (BCBS) may hamper the development of covered bonds and restrict long term financing, according to a paper published by the European Mortgage Federation (EMF) and European Covered Bond Council (ECBC) on Monday. This is due to the assumption that deposits are a more stable source funding and because unsecured funding is favoured over secured.