The European Covered Bond Council will in the coming months focus on addressing the impact of risk-weight floors for mortgages being proposed by the Basel Committee, which representatives of the Danish FSA and issuers questioned at an ECBC plenary yesterday (Thursday).

Carsten Tirsbæk Madsen will in the new year take over as president of the Covered Bond & Mortgage Council, the umbrella organisation for the European Mortgage Federation and European Covered Bond Council.

The covered bond market shrank last year for the first time since the European Covered Bond Council began collating statistics, according to figures released by the industry body last week, although ECBC representatives said this could be interpreted positively, while some Nordic markets are rising in prominence.

The European Securities & Markets Authority (ESMA) has proposed exempting covered bond derivatives from a central clearing obligation under EMIR if certain conditions are fulfilled, and market participants said the proposal sends a positive signal.

Issuer ratings look set to have been scrapped as LCR eligibility criteria for covered bonds and a transparency requirement introduced, according to a leaked EC document on the delegated act that the Commission is likely to finalise in September.

The European Mortgage Federation and European Covered Bond Council are being merged, with ECBC chairman Carsten Tirsbæk Madsen saying that the move should help their lobbying efforts by highlighting the relationship between covered bonds and mortgage borrowers.

CRR-compliant covered bonds rated at least A- should count toward liquidity buffers with the Covered Bond Label playing a role as a quality criterion under a new approach the European Covered Bond Council (ECBC) has suggested to the EC ahead of its final decision on LCRs.

The ECBC has this week released 2012 covered bond market statistics. The numbers are the most comprehensive set of covered bond figures available as they include both public and private placements and retained bonds, and Florian Eichert, Crédit Agricole CIB senior covered bond analyst, looks at what they tells us about Nordic markets.

Covered bonds should count as Level 1 assets under CRD IV, the ECBC argued in a position paper released on Monday, with this treatment particularly important for domestic covered bonds in Denmark as it would otherwise be “simply impossible” for the country’s financial institutions to fulfil LCR requirements.

Norwegian covered bond issuers will gain representation on the steering committee of the European Covered Bond Council from January, with DNB’s Helge Stray becoming one of two new members.