To limit the risk of a bank default leading to major problems at other institutions, regulators limit the overall money that a bank can lend to another institution. Regulators look at the overall existing exposure, including, for example, bond investments or direct lending.

The Finnish Ministry of Finance presented proposals for the implementation of the CRD IV and CRR framework to parliament last Thursday (17 April), with the proposals in line with expectations, according to an official from the Federation of Finnish Financial Services.

The Swedish Bankers’ Association has suggested changes to the prevailing Basel III proposal for a Net Stable Funding Ratio to rectify what it sees as punitive treatment of covered bonds and incentives for banks to favour less stable funding sources.

The benchmark covered bond market was quiet this week due to public holidays and blackouts, but market conditions were described as positive by bankers, and Nordic financial institutions, which are among the first to report results, have been cited as a potential source of issuance.

European Supervisory Authorities EBA, ESMA and EIOPA launched a consultation on draft Regulatory Technical Standards for EMIR on Monday, which they said provide some flexibility for covered bonds, with one source cautiously welcoming the proposals as “looking quite positive”.

Arion Bank, the successor to Kaupthing Bank, is poised to become the first Icelandic bank to tap the euro senior unsecured market since the collapse of the country’s banks in the financial crisis, a move that the issuer’s CFO said the market is ready for.

Following the first issuance of a euro covered bond to incorporate fixed and floating rate tranches by UniCredit in January Crédit Agricole CIB analysts explore investor opinions of floating rate notes.

Norway’s KLP Banken is eyeing a first mortgage-backed covered bond issue out of new entity KLP Boligkreditt in the coming months, after having received approval for the specialist institution from the Norwegian FSA (Finanstilsynet) last month.

Aktia Bank issued a Eu500m no-grow five year covered bond on Monday, with an official at the issuer noting that the deal gained traction quickly, allaying some nervousness about how it would fare after softening in the wider market late last week.

Nordea Bank priced a $2.25bn triple tranche senior unsecured bond on Monday, the last day of the first quarter, with a syndicate official at one of the leads noting that a larger deal may have been possible.