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Covered Bond Opinion

  • Now is the time to embrace funding flexibility by considering different execution strategies and pricing techniques
  • SRI
    In October La Banque Postale became the first bank to announce it was exiting fossil fuels altogether, and the first to have a validated Science-Based Target for decarbonising its portfolio. Philippe Heim, the bank’s CEO, talked to GlobalCapital about what this path will involve, and LBP’s wider drive to create ‘impact banking’.
  • A cluster of financial institutions failed to get price traction for their unsecured deals this week, unlike covered bonds where demand soared
  • Conditional pass through (CPT) covered bonds, once hailed as a genuine innovation that gave reliable and cheap market access, have had their day
  • They may have failed to gain traction in the euro market so far, however deals that are structured like covered bonds but secured on exotic assets and issued by companies have a future
  • A renovation revolution can kick start the journey to Europe’s net zero carbon target — while boosting the economy more effectively than quantitative easing
  • Just as investors are starting to worry that inflation may not be transitory after all, so issuers should be concerned that primary market conditions may become more treacherous
  • Until the European Central Bank starts to pull back from providing such cheap repo lending, issuers have little incentive to diversify their funding
  • If the European Central Bank is serious about promoting banking sector consolidation, it must wean issuers off the Targeted Long Term Refinancing Operation
  • Central banks’ control was once limited to financial matters — they squatted in the corner, largely unseen. Now, they are stars in the drama — active, talkative stewards of the economy. Society looks to them to solve its problems; not to synch with government, but to make up for its deficiencies.
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