"Microfinance, Innovation, Job Creation – How Can Covered Bonds Help?", European Parliament, S&D Breakfast Event, hosted by MEP Jeppe Kofod

The event brought together the European Commission, represented by Didier Millerot (Head of Unit in DG FISMA), MEPs Jeppe Kofod (co-rapporteur on the PANA Inquiry Committee), Bernd Lucke (ECON Rapporteur on Covered Bonds), and Olle Ludvigsson (ECON), and stakeholders' representatives to discuss how covered bonds can help microfinance and boost innovation.The EESC was represented by Ms Milena Angelova, rapporteur for the opinion on "EU Regulatory Framework for Financial Services".

The key issues discussed were related to:

1. How does the covered bonds markets function and what are the possibilities for cross-border investments?

2. Is any EU legislative action needed in connection with covered bonds? Is it a good idea to regulate further?

3. What kind of assets should the covered bonds consist of?

The discussion helped participants reach the conclusion that covered bonds are strategic assets for the EU. National supervisors should be closely involved and should have the freedom to shape the national framework for covered bonds, and the same degree of security should be provided across the EU. A new solution, mainly suitable for smaller banks, was also suggested: the "EU secure note", which could include some features of covered bonds, but be simpler and more flexible. The need for the option to set up a portfolio of covered bonds was also highlighted. The fact that there is no "one-size-fits-all" solution was again stated.

The final conclusion was that SMEs get indirect benefits from mortgage-secured covered bonds.