Covered bond NSFR carve-out not expected

Regulation
By Bill Thornhill
07 Mar 2019

The final text of the net stable funding ratio has improved slightly compared to earlier versions, but the covered bond industry’s hopes for equal treatment relative to senior unsecured debt has fallen on deaf ears. The Council of Europe is expected to adopt the regulation from mid-March before putting it to a parliamentary vote in April.

The net stable funding ratio (NSFR) is a rule which obliges banks to match longer-term assets and liabilities. 

Unencumbered mortgages have a required stable funding (RSF) factor of 65%, meaning that a bank that funds these with senior unsecured debt has an NSFR above 100%.

The original Basel ...

Please take a trial or subscribe to access this content.

Contact our subscriptions team to discuss your access: subs@globalcapital.com

Or sign up for a trial to gain full access to the entire site for a limited period.

Free Trial

Corporate access

To discuss GlobalCapital access for your entire department or company please contact our subscriptions sales team at: subs@globalcapital.com or find out more online here.