vdp welcomes European Commission's proposal on harmonisation of covered bonds

The Association of German Pfandbrief Banks (vdp) welcomes the legislative package put forward today by the European Commission on the harmonisation of covered bonds in the European Union. "As expected, the proposed directive is principle-based and lists all the key quality characteristics of covered bonds. It calls for a minimum level of harmonisation and leaves sufficient scope for specific national features, based on national laws. Only the requirements for cover assets eligibility could have been more detailed in the opinion of Pfandbrief banks, to provide better protection for covered bonds as a quality product," said Jens Tolckmitt, Chief Executive of the Association of German Pfandbrief Banks.

The regulations that have been presented comprise a general covered bond directive, which will replace the relevant provisions of the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive, and an addition to Article 129 of the "Capital Requirements Regulation" (CRR), which makes a clearer distinction between the core group of traditional covered bonds and other types of covered bonds. With its current proposal, the Commission is calling for high-quality cover assets, although it has not provided details of the exact requirements for permissible cover assets. This general wording allows the interpretation of eligible cover assets to be taken beyond the scope of traditional covered bonds such as Pfandbriefe. The aim is to enable new types of assets to be used as cover, in order to finance additional growth in the real economy.

"We welcome the general compatibility of the moderate regulations of the draft directive and the plans to shore up Article 129 CRR with the existing standards of the Pfandbrief Act. The proposal will further improve future prospects for covered bonds as a key product for bank funding in Europe and will create a stable basis for their privileged regulatory treatment. What is crucial for us is that the rules leave the necessary scope to further develop the quality of national products such as Pfandbriefe," Jens Tolckmitt said.


The legislative package put forward today, which the European Commission had already announced in its Mid-Term Review of the Capital Markets Union Action Plan in June 2017, forms part of plans to create a capital markets union in order to further harmonise and deepen the European capital market. With the regulations on the harmonisation of covered bonds, the Commission is aiming to open up the covered bond market to new types of cover assets and to widen it. At the same time, the intention is to further standardise the market with binding criteria and definitions and to protect it against contagion. This is intended to create a basis for safeguarding the existing privileged regulatory treatment for Pfandbriefe and covered bonds in Europe in the future.

Press materials:

Facts and Figures
Press contacts
Dr. Helga Bender
Head of the Communication, HR & Finance
Phone +49 30 20915-330
send e-mail »
Yvonne Sternkopf
Phone +49 30 20915-380
send e-mail »
Christian Walburg
Manager Investor Relations 
Phone +49 30 20915-340
send e-mail »

   Where we are:   Georgenstrasse 21
   10117 Berlin, Germany

   how to get there
Imprint   |   Privacy  |  Statutes