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FIGCovered Bonds

Fitch changes tune on encumbrance

Back in March, Fitch said that it “did not view over-dependence on covered bonds as a risk for many banking groups.” Roll on three months and the rating agency’s tone is a bit more measured. “An over‐reliance on secured financing could encumber most assets on the company’s balance sheet, reducing overall financial flexibility,” said the agency, in a wider looking piece on bank funding profiles.

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