Falling depos could boost covered supply

By Bill Thornhill
01 Mar 2021

Increased consumer spending leading to a fall in deposits would provide the catalyst for higher covered bond issuance, according to one European bank's head of funding. But only if the credit curve steepens and senior debt grows more expensive to raise relative to covered bond funding.

Key to covered bond issuance levels will be the pace of the economic recovery from the Covid-19 pandemic. As consumer spending rises and savings decrease, the European Central Bank will be more confident that it does not need to roll over its Targeted Longer-Term Refinancing Operations (TLTRO). 

Banks may ...

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