Covered Bond Blog

About the blog

Complementing our portfolio of covered bond conferences, this blog provides year round comment on the global covered bond market, its participants and future. Our opinion pieces cover the core European markets, as well as Canada, Australia and the new emerging covered bond markets in Asia, Eastern Europe, Africa and Latin America.

About the main blogger

Richard Kemmish is a covered bond consultant, and editorial consultant for Euromoney Conferences. He has worked in the covered bond market for 12 years and in housing finance more generally for 20. Richard Kemmish Consulting Limited provides structuring services, advice and, most importantly, education on all aspects of the covered bond market.

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  • Risk free weight

    29 Nov 2017 | Richard Kemmish

    There is, apparently, growing support amongst some politicians in the European parliament – perhaps incongruously, the centre-right and green parties - for a challenge to the zero risk weighting of government bonds. read more

  • Singapore’s 4% isn’t Canada’s 4%

    28 Nov 2017 |

    On a superficial level, Canada and Singapore don’t have a lot in common. But in covered bond land we look beyond the superficial (usually) and can see some remarkable market, regulatory and structural similarities. read more

  • The fixed or floating rate mortgage dilemma

    22 Nov 2017 | Richard Kemmish

    There are political arguments for and against fixed rate mortgages. Personally I think that retail borrowers are better placed to make the decision than politicians read more

  • How safe are deposits?

    20 Nov 2017 | Richard Kemmish

    The future of the European deposit guarantee fund is a topic of vital importance to the long term prospects for the covered bond market. And it’s time I vented my spleen. read more

  • Time to update the emcumbrance debate?

    15 Nov 2017 | Richard Kemmish

    The question should move from “how does the number of covered bonds outstanding influence the return for other creditors?” to “how does the number of covered bonds outstanding influence the probability that bail-in will be an ineffective resolution tool?” read more

  • Can CB harmonisation work in practice?

    10 Nov 2017 | Richard Kemmish

    It is a truth universally acknowledged* that a standard level of harmonisation for all covered bonds is fundamentally flawed. read more

  • Time to reconsider FRNs?

    06 Nov 2017 | Richard Kemmish

    In the recent wave of Greek covered bonds one of the lesser noted curiosities was a floating rate bond issued by Piraeus Bank. read more

  • A non-contrarian view of Mifid

    01 Nov 2017 | Richard Kemmish

    As a regular conference moderator one thing I really, really dislike is consensus – makes for a very dull panel when we all agree with one another. So I am somewhat reluctant to add to the valid but dull discussion that ... read more

  • Green covered bonds: prudential?

    28 Oct 2017 | Richard Kemmish

    An obvious alternative asset class for ESNs is green mortgages. But they open up a whole new debate when it comes to regulation and eligibility. read more

  • Liar mortgages

    24 Oct 2017 |

    The European Commission has announced that, in the face of overwhelming pressure from industry, they have backed down on their proposal to exclude some ‘self-certified’ mortgages in STS securitisations. read more

  • What is the point of over-collateralisation?

    22 Oct 2017 |

    Before we discuss the appropriate level of over-collateralisation, we need to talk about whether we need it at all. read more

  • What is the biggest threat to the covered bond market?

    18 Oct 2017 | Richard Kemmish

    Another poll at the Euromoney covered bond conference provided very split opinions on this topic. I’m not sure if that is reassuring: there is no one big obvious risk out there – or worrying: we don’t know what our ... read more

  • Harmonisation: a necessary risk?

    12 Oct 2017 | Richard Kemmish

    "What do you think about covered bond harmonisation?” this was the subject of an online poll at the recent Euromoney covered bond conference in Barcelona. The results were mainly encouraging. read more

  • The end of the purchase programme: supply side

    06 Oct 2017 | Richard Kemmish

    In my previous post I got a little sceptical about the market’s sanguine attitude towards the end of the ECB’s covered bond purchase programme. In particular I posited that the relative price inelasticity of demand for covered bonds ... read more

  • Thoughts from Barcelona: Parliament’s response

    28 Sep 2017 |

    In my previous post I commented on the speech by Didier Millerot, the man responsible for the forthcoming covered bond directive. Another keynote in Barcelona was a response to this by Bernd Lucke MEP, the rapporteur for the directive in ... read more

  • Thoughts from Barcelona: Commission’s keynote

    27 Sep 2017 |

    At the Euromoney Covered Bond Conference in Barcelona last month the thoughts of many delegates were running ahead to Q1 next year and the publication of the first ever Covered Bond Directive. So it was particularly fitting that the man ... read more

  • The end of the purchase programme: Economics 101

    24 Sep 2017 | Richard Kemmish

    Maybe we should hold our biggest annual conference in Barcelona every year. Something about being there makes delegates strangely upbeat in a way that – with all due respect to Dusseldorf – some venues don’t. read more

  • The harmonisation debate: please vote

    12 Sep 2017 | Richard Kemmish

    In my previous post I mentioned the new on-line polling that Euromoney Conferences will be using at the Congress in Barcelona. Whilst the previous panel that I discussed the questions for was on emerging market covered bonds, a subject close ... read more

  • New issuers: please vote!

    11 Sep 2017 | Richard Kemmish

    At the covered bond conference in Barcelona this year Euromoney Conferences will be asking for the audience’s input. For many of the sessions the moderator has selected a couple of key questions for the subject of the panel and ... read more

  • Different understanding of triggers

    08 Sep 2017 | Richard Kemmish

    Is it really prudent to have two ‘regulatory’ definitions of acceptable trigger events? read more

  • The investors speak

    08 Sep 2017 | Richard Kemmish

    As part of the run-up to the Euromoney/ECBC Covered Bond Forum in Barcelona, Euromoney Conferences has asked three leading investors their opinions on the topical issues of the day. In the interests of debate - I can’t resist the ... read more

  • Rates and profits: a broken correlation?

    06 Sep 2017 | Richard Kemmish

    Profitability is a problem of lower interest rates. And the covered bond market will start to feel this first when the rate cycle changes read more

  • The risk we dare not name: credit

    04 Sep 2017 | Richard Kemmish

    In my previous post on threats to the covered bond market I didn’t mention the big one, a risk so big that it warrants an entire panel all to itself in the forthcoming Barcelona conference: credit. read more

  • The calm before the storm

    22 Aug 2017 | Richard Kemmish

    Is the biggest threat to the covered bond market growing irrelevance? read more

  • What is normal?

    21 Aug 2017 | Richard Kemmish

    I am getting quite annoyed at the number of people who have pointed out that BBVA and CFF now trade in line with one another (at some maturities at least) as evidence that pricing in the covered bond market is ... read more

  • New wine in old bottles (continued)

    15 Aug 2017 | Richard Kemmish

    So we will have to upgrade most of the old covered bonds to the new European rule book (see previous post), the question remains: how? read more

  • New wine in old bottles

    08 Aug 2017 | Richard Kemmish

    Just what will happen to old bonds under new covered bond laws? Grandfathering rules and dual programmes are two answers, but they could throw up more problems than they solve. read more

  • Do you like my new haircut?

    07 Aug 2017 | Richard Kemmish

    It has been heavily rumoured that the ECB will this autumn announce that conditional pass through covered bonds will have a new uniform hair-cut when presented for repo instead of the existing size, maturity and basis dependent hair-cut grid. read more

  • Winding down

    03 Aug 2017 | Richard Kemmish

    The ECB have announced that covered bonds issued by wind-down entities will not be eligible for their purchase programme - at least, for purchase under the purchase programme. Those that they have already bought will presumably, hopefully, still be ok - and ... read more

  • Should you be scared of the great unwind?

    31 Jul 2017 | Richard Kemmish

    Looking at the numbers rather than the words, it seems that the ECB has already started to taper its covered bond purchase programme. Whatever the future for quantitative easing in total, the covered bond market appears to have done its ... read more