Euro authorities flounder on covered bonds

By Bill Thornhill
03 Apr 2014

Representatives of the European Commission and the European Central Bank at the European Covered Bond Council’s plenary session in Paris were left struggling to define who would be responsible for a covered bond bank on issuer insolvency under the Single Supervisory Mechanism, only a week before the new regulatory framework is due to get final approval from the European Parliament.

Banking union, the Single Supervisory Mechanism and the Single Resolution Fund should theoretically sever the sovereign-bank link, said the representatives, but nobody knew who ultimately had the responsibility to grant or take away a covered bond bank’s license, which left delegates wondering who would ultimately be responsible for ...

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