Basel gives covered bonds a global boost

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By Bill Thornhill
11 Dec 2017

The Basel Committee on Banking Supervision’s (BCBS) has formally recognised covered bonds for the first time. With the introduction of a global preferential risk weight, supply and demand should be boosted, along with the market’s global expansion to new jurisdictions.

The Basel III reforms, which the BCBS concluded last week, introduced a specific chapter on covered bonds that presented a standalone treatment for the asset class at the Bank of International Settlements level for the first time.

“In other words, the asset class is perceived to be different ...

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