Press release

ECBC Publishes Updated Global Concept Note on Third Country Equivalence for Covered Bonds

The European Covered Bond Council (ECBC) is pleased to announce the publication of the 2024 update of its Global Concept Note on Third Country Equivalence for Covered Bonds.


The European Union’s Covered Bond Directive serves as a significant legislative lighthouse, promoting the harmonisation and alignment of market best practices through a principle-based approach. The Directive successfully established a comprehensive legislative standard, which is fostering structural convergence in legal fundamentals and market best practices. Therefore, the Directive provides the basis for stable, long-term funding mechanisms, facilitating robust diversification of funding strategies for lenders and offering a secure haven for investors.


Against this backdrop, the ECBC Global Issues Working Group, chaired by Colin YS Chen (Association of Banks Singapore & DBS Bank), developed the Global Concept Note in early 2023 to provide a roadmap aimed at helping regulators and national supervisory authorities outside of the EEA, and stakeholders in covered bond markets more generally, to act in the covered bond sphere by meeting the requirements and align policy and market best practices to achieve equivalence with the Covered Bond Directive.


In the wake of the Silicon Valley Bank and Credit Suisse turmoils during 2023 together with more general geopolitical tensions, covered bonds demonstrated resilience, serving as a safe haven for investors and acting as market opener. This evolving landscape, including new legislation in Georgia and Morocco, expands opportunities globally. With covered bond frameworks now spanning four continents, the third country equivalence regime offers a chance to harmonise policies and enhance regulatory treatment. This updated 2024 version of the Note aims to catalyse the ongoing harmonisation of the covered bond asset class at both EU and global levels.


The ECBC Global Issues Working Group, together with the International Secondary Mortgage Market Association (ISMMA), are acting as market think-tanks to provide a global level playing field, while the Covered Bond Label is the principal global market portal facilitating investors’ and issuers’ due diligence. The Working Group aims to improve transparency, convergence and foster a shared understanding of the covered bond concept.


Commenting on the publication, Luca Bertalot, EMF-ECBC Secretary General, stated:

“Covered bonds have proven their global ability to act as a beacon of stability in financial markets and reopened markets after all recent financial disruptions. The covered bond community has acknowledged the important role played by the Working Group as a global think-tank for the exchange of market best practices and as an educational platform for issuers and the global investor community. Therefore, the ECBC remains fully committed to further strengthening the global covered bond market and providing    a forum to align frameworks around the world.”


The ECBC Global Concept Note on Third Country Equivalence for Covered Bonds will be presented officially on the occasion of the ECBC Asian Covered Bond Symposium taking place in Singapore (11-15 March 2024).