Written by Angelos Delivorias (3rd edition),

Schiffspfandbrief mit Modellschiff
© Björn Wylezich / Fotolia

Covered bonds are debt securities issued by credit institutions and secured by a pool of mortgage loans or credit towards the public sector. They are characterised further by the double protection offered to bondholders, the segregation of assets in their cover pool, over-collateralisation, and their strict supervisory frameworks. Currently, their issuance is concentrated in five Member States. National regulatory regimes vary widely in terms of supervision and composition of the cover pool. Lastly, despite benefiting from preferential treatment under the Capital Requirements Regulation (CRR), they share no common definition, which can lead to different securities benefiting from this treatment. To remedy this, the Commission has adopted proposals for, on the one hand, a directive, which would lay down investor protection rules and provide common definitions, and on the other, a regulation, which would amend the CRR with regard to covered bond exposures. Parliament voted in plenary on 18 April 2019 to adopt the texts agreed in trilogue. After linguistic corrections, Parliament approved corrigenda and the two acts were signed on 27 November 2019.

Interactive PDF

Proposal for a directive of the European Parliament and of the Council on the issue of covered bonds and covered bond public supervision and amending Directive 2009/65/EC and Directive 2014/59/EU
Proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) No 575/2013 as regards exposures in the form of covered bonds
Committee responsible: Economic and Monetary Affairs (ECON) COM(2018) 94
COM(2018) 93
12.3.20182018/0042 (COD)
2018/0043 (COD)

Ordinary legislative procedure (COD) (Parliament and Council on equal footing – formerly ‘co-decision’)
Rapporteur: Bernd Lucke (ECR, Germany)
Shadow rapporteurs: Dariusz Rosati (EPP, Poland)
Alfred Sant (S&D, Malta)
Caroline Nagtegaal (ALDE, Netherlands)
Marisa Matias (GUE/NGL, Portugal)
Philippe Lamberts (Greens/EFA, Belgium)
Barbara Kappel (ENF, Austria)
Procedure completed. Directive (EU) 2019/2162
Regulation (EU) 2019/2160
OJ L 328, 18.12.2019, pp. 1-6 & pp. 29-57