AI Summary of Article 129 Exposures in the form of covered bonds
This document outlines the eligibility criteria for covered bonds to receive preferential treatment under Directive (EU) 2019/2162. Covered bonds must be collateralised by eligible assets including exposures to government entities and secured loans, adhering to specific limit thresholds. Furthermore, a minimum overcollateralisation level of 5% is mandated, ensuring robust asset coverage.
Special provisions apply for loans and the treatment of exposures to credit institutions, with specific caps based on credit quality steps. Existing covered bonds issued before specified cut-off dates retain eligibility for previous regulatory standards, enhancing stability in the market.
Article 129 Exposures in the form of covered bonds
1. To be eligible for the preferential treatment set out in paragraphs 4 and 5 of this Article, covered bonds as defined in point (1) of Article 3 of Directive (EU) 2019/2162 of the European Parliament and of the Council [Directive (EU) 2019/2162 of the European Parliament and of the Council of 27 November 2019 on the issue of covered bonds and covered bond public supervision and amending Directives 2009/65/ EC and 2014/59/EU (OJ L 328, 18.12.2019, p. 29).] shall meet the requirements set out in paragraphs 3, 3a and 3b of this Article and shall be collateralised by any of the following eligible assets:
(a) exposures to or guaranteed by central governments, the ESCB central banks, public sector entities, regional governments or local authorities in the Union;