Rising unemployment threatens European cover pool quality, says S&P

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By David Freitas
10 Jul 2020

Increasing European unemployment and a subsequent rise in the use of mortgage holidays is set to put pressure on the credit quality of European lenders and their covered bond pools, according to S&P.

According to S&P, payment holiday usage rates have varied in between countries according to the incentives to take part as well as how easy they are to access, rather than strictly by economic need.

“Although the underlying borrowers’ credit quality is partly driving payment holiday utilisation, it seems ...

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