European Commission welcomes agreement on EU rules on covered bonds

27 February 2019

On 26 February 2019, the European Commission welcomed the political agreement reached by the European Parliament and Member States on new rules to promote the EU covered bonds market.

An important element of the Capital Markets Union (CMU), the new rules will provide a source of long-term financing for banks in support to the real economy.

The agreed rules aim to foster the development of covered bonds – financial instruments issued by banks to fund the economy – across the EU, particularly in those Member States where such markets have not yet developed. They will create a harmonised EU framework without disrupting already established and well-functioning national markets. By putting in place a cost-effective and long-term funding source, these rules will help financial institutions, in particular banks, to finance the real economy across the EU. These measures will also increase cross-border flows of capital and investments and promote harmonised prudential rules for those instruments, contributing to financial stability.

For additional information, read the full press release.