Swedish covered bond liquidity buffer under the spotlight

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By Bill Thornhill
28 Jan 2021

Swedish bankers have argued that proposed amendments to the country's covered bond law, which bring it into line with the EU's Covered Bond Directive (CBD), must demand that liquidity buffers in soft bullet bonds cover interest payments during any 12 month extension period, as opposed to covering interest and principal for 180 days — a standard more commonly seen in hard bullet maturities.

The Swedish government appointed a committee of inquiry which recently published a consultative report setting out proposed amendments for the Swedish Covered Bond Act, and invited responses to be submitted no later than February 9.

The Association of Swedish Covered Bond issuers (ASCB) and Swedish Bankers' ...

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