The Commission has reported to the EP and Council on the capital requirement for covered bonds under the CRR. The report assesses the appropriateness of preferential risk weights for covered bonds, aircraft loans and guaranteed residential loans before reviewing the existing derogations for covered bonds. The Commission concludes that:

  • whilst it does not currently propose amending Article 129 (Exposures in the form of covered bonds), it may submit such legislative proposals following stakeholder feedback on the matter (see FReD 2 October); and
  • the Commission will wait until it has reviewed stakeholder feedback to the consultation before deciding whether to allow the derogations for covered bonds to lapse, make them permanent or replace them with a covered bond framework.

The consultation closes on 6 January 2016. (Source: Commission Reports on Covered Bonds Requirement)