Covered Bonds

Banks have been using covered bonds as a tool for funding the balance sheet for over 250 years. Here, covered bonds expert Richard Kemmish provides a detailed overview of these products and the markets in which they trade.


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15 videos • 2 hours 11 minutes

  • Covered Bonds (1/15): History

    The covered bond market has a long and illustrious history. In this first video of the series on the covered bond market, Richard describes how the covered bond has performed and how it has developed from its inception to 2008.

    Richard Kemmish07:16

  • Covered Bonds (2/15): The Market Today

    The covered bond market is developing in exciting new ways. In this video of the series, Richard takes a look at the market as it stands today, and discusses how covered bonds can be fixed rate, euro denominated and used to fund mortgages.

    Richard Kemmish10:50

  • Covered Bonds (3/15): Structuring Alternatives

    There are several different ways to structure covered bonds. In this video, Richard covers the main structures, their implications and why they might be the best option in any given country.

    Richard Kemmish06:38

  • Covered Bonds (4/15): Over-collateralisation

    To provide the level of protection for covered bonds demanded by investors, supervisors and rating agencies, you need more assets backing the bonds than there are bonds outstanding. In this video of the series, Richard discusses over-collateralisation: how to calculate it and how it is regulated.

    Richard Kemmish07:14

  • Covered Bonds (5/15): Eligible Assets

    In this video, Richard Kemmish looks at eligible assets and analyzes their effect on collateral covered bond agreements.

    Richard Kemmish06:32

  • Covered Bonds (6/15): Regulation

    The new EU Covered Bond Directive has standardised the definition and minimum standards for covered bonds. In this video of the series, Richard discusses the most important of those investor rules for a bank investor, insurance investor and mutual fund investor.

    Richard Kemmish10:27

  • Covered Bonds (7/15): Securitisations Compared

    Covered bonds and securitisations have a lot in common, but they are also very different in some important ways. In this video, Richard discusses the similarities and the differences, between the two products, in terms of their uses, structure and regulation.

    Richard Kemmish10:07

  • Covered Bonds (8/15): Swaps

    One of the problems many covered bonds have to address is the mismatch between the interest rate on the assets and the interest rate on the bonds. Richard discusses how swaps are used to address this mismatch by explaining how swaps work, explaining how they are documented and providing some examples.

    Richard Kemmish08:32

  • Covered Bonds (9/15): Loan-to-value (LTV)

    The loan-to-value, or LTV, of a mortgage is one of the most intuitive measures of the riskiness of a loan. Here, Richard explains some of the variations of applying an LTV rule and some of the ways to calculate it.

    Richard Kemmish09:38

  • Covered Bonds (10/15): Central Banks

    Central banks are some of the most important players in the covered bond market. In this video, Richard looks at three of those ways: as investors, as repo counterparties and via quantitative easing programmes.

    Richard Kemmish07:23

  • Covered Bonds (11/15): Green Covered Bonds

    The Covered Bond market has pioneered the idea of green covered bonds. In this video, Richard goes into detail on how this came about.

    Richard Kemmish07:41

  • Covered Bonds (12/15): Mitigating Extension Risk

    One of the problems from the popularity of soft-bullet maturities is that in the process of adapting it in different countries, there has been diversity about the finer details. In the final part of his Covered Bond series, Richard looks at how long the extension period should be, what interest rate is applied during the extension and which remedial actions must be taken.

    Richard Kemmish09:08

  • Covered Bonds (13/15): European Secured Notes (ESNs)

    There is a lot of discussion about introducing new types of covered bonds backed by different asset classes. To distinguish this idea from traditional covered bonds, most people refer to the proposed bonds as European Secured Notes or ESNs. In this video, Richard takes a look at the prospects for the European Secured Notes market and what it might look like.

    Richard Kemmish07:37

  • Covered Bonds (14/15): The EU Covered Bond Directive

    Covered bonds have been around for 250 years, but a pan-European law for them - the EU Covered Bond Directive - is relatively new. Richard discusses how this Directive came about, what it says and what the implications are for the future of the covered bond market.

    Richard Kemmish13:26

  • Covered Bonds (15/15): Public Policy

    Regulators tend to see the benefits of the covered bond product, but banks have argued that they have no need for more wholesale funding tools. In the final video of this series on covered bonds, Richard discusses some of the arguments in favour of the introduction of covered bonds, some of the objections that have been raised and what can be done to address those concerns.

    Richard Kemmish08:40