Danes granted covered bond liquidity wish

By Bill Thornhill, Owen Sanderson
15 May 2014

A leaked European Commission document shows that covered bonds will be granted privileged status in new bank liquidity rules, in defiance of Basel standards, but in line with pressure from the Danish government and the European Banking Authority's own research.

Covered bonds will be elevated to a level one asset in the Liquidity Coverage Ratio (LCR) according to an internal document being circulated at the European Commission. This means banks can use more of the securities to meet their regulatory liquidity needs — 70% of regulatory liquidity can ...

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