The smooth functioning of the covered bond market is obviously essential for market participants but there has also been an increasing recognition of its importance from policy makers and regulators. Above and beyond the benefits of close public supervision, covered bonds encourage prudent behaviour among banks and provide access to long term funding, thus enabling a better management of the maturity mismatch between assets and liabilities as well as mitigating liquidity risk.
Therefore, the assembled trade associations requested that a greater consideration is given to these elements in the finalisation of the proposals for a new capital and liquidity framework to be endorsed by G20 Leaders as a commensurate response to improving the resilience of the financial sector and ensure that this is applied consistently in the context of all financial services regulatory and supervisory frameworks.
© CEA - Comité Européen des Assurances
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