The UK's regulatory framework for covered bonds

The Government and FSA believe covered bonds can be a valuable source of stable funding for banks and building societies. This review set outs the key strengths of the UK’s regulatory framework for covered bonds and the FSA’s supervision of regulated covered bonds.

It consults on proposals to raise transparency in the UK covered bond market and make the UK regime more readily comparable with European peers. This will increase the appeal of UK covered bonds to investors, making it easier for banks and building societies to raise funding in order to lend to households and businesses.

This consultation is aimed at anyone with an interest in the covered bond market, such as issuers of covered bonds, investors, and market experts such as rating agencies and analysts.

The Government received responses from both issuers and investors in regulated covered bonds and from a number of other organisations with an interest in the UK covered bond market. The Treasury and the FSA also received informal responses from a number of other firms.

These proposals will increase the visibility of regulation, make it easier to understand the strengths of the UK regime, and facilitate comparability between the UK and other jurisdictions by creating a more prescriptive regulatory framework.

• Find out more about the Government’s work to support lending to consumers
• Find out more about Covered Bonds
• The UK Regulated Covered Bond Council (UKRCBC) (external website)