ECBC argues against hard encumbrance limits
A large part of a bank’s asset encumbrance is hard to measure and this may lead regulators to focus on one of the most visible and transparent components of encumbrance: covered bonds, according to a paper from the European Covered Bond Council published on Wednesday. The trade association urged European policy makers to take a holistic approach to assessing encumbrance and said a hard encumbrance cap should be avoided.
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