When RMBS are safer than covered bonds

By Tom Porter
19 Mar 2015

Covered bonds and RMBS share important similarities, as both the European Central Bank and Bank of England acknowledged last year in a discussion paper. As the two asset classes evolve, the vastly different regulatory regimes applied to each should become more difficult to justify.

A comparison of Rabobank’s Storm 2015-1 RMBS, originated by its Obvion subsidiary, with a forthcoming conditional pass through covered bond to be issued by Van Lanschot Bankiers shows that regulation remains a more important determinant of price than fundamental ...

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