Press release

EMF-ECBC Welcomes CMU Mid-Term Review

8 June 2017

The European Mortgage Federation – European Covered Bond Council (EMF-ECBC) welcomes today’s publication by the European Commission of its Mid-Term Review of the Capital Markets Union (CMU) Action Plan.

The EMF-ECBC fully supports the CMU’s goal of strengthening investment and funding for the long-term, and recognises the need to build a truly single market for capital in order to “ensure easier access to finance for businesses and to support investment in the real economy”. This commitment to helping build the CMU was evidenced earlier this week by the EMF-ECBC’s signature, alongside European Commission Vice-President Dombrovskis, of the High-Level Principles for Banks’ Feedback on declined SME Credit Applications.

Against this background, the EMF-ECBC would like to highlight the crucial role that the European Commission is playing in co-ordinating numerous market and institutional initiatives launched at national, European and international levels, all of which contribute towards the realisation of the CMU. For its part, the EMF-ECBC has sought to be an active contributor to the CMU Action Plan, having advanced several proposals and initiatives relating to European mortgage and covered bond markets such as the European Secured Note (ESN), the Covered Bond Label and the Energy Efficient Mortgage Initiative.

Mortgage credit and the covered bonds that fund a large proportion of such lending in Europe have a direct impact upon the real economy. As such, it is essential that the key role this sector plays in providing housing security for citizens and their families is recognised in the context of the CMU. For this reason, the EMF-ECBC backs the concept of a high-quality principle-based EU-wide framework for covered bonds that does not adversely impact upon well-functioning national markets, which would act as a regulatory and qualitative market benchmark for both European and global market participants. Consequently, the EMF-ECBC would like to express its appreciation of the careful market analysis which has been undertaken by the European Parliament, the European Commission and the European Banking Authority over recent months.

In this context, during today’s board meeting in Rome, the ECBC has established two dedicated task forces, the Task Force on the EU Framework for Covered Bonds and the Task Force on European Secured Notes, to support the relevant institutions at national and European level in their work avoiding any unintended consequences and developing the new ESN asset class.

Luca Bertalot, EMF-ECBC Secretary General, said:

“The funding of the real economy is our members’ raison d’être and our industry is fully aligned with the objectives of the CMU. We are delighted to see that our initiatives, such as the Covered Bond Label, the European Secured Note and the Energy Efficient Mortgage, are gaining traction within markets and the European Institutions. We are also very supportive of the European Commission’s approach towards developing an EU framework for covered bonds. As such, through our task forces and wider network of member experts, we stand ready to offer technical support to the European institutions in the next phase of the construction of the CMU.”