AI Summary of 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 (Text with EEA relevance) (Covered Bond Directive)
Directive (EU) 2019/2162 establishes a Union-wide minimum framework for covered bonds issued by credit institutions. It harmonises core structural features — a clear definition, dual recourse to the issuer and a segregated cover pool, and bankruptcy remoteness (no automatic acceleration) — and sets requirements on eligible cover assets (including those in Article 129 of Regulation (EU) No 575/2013), valuation, collateral location, segregation, derivative use, overcollateralisation and a cover-pool liquidity buffer. It also governs intragroup and joint-funding arrangements and rules for extendable-maturity structures.
Member States must designate competent authorities to grant permission by covered-bond programme, supervise ongoing compliance, require reporting and impose effective, proportionate sanctions. The Directive introduces voluntary labels “European Covered Bond” and “European Covered Bond (Premium)”, provides transitional rules for issues before 8 July 2022, and mandates reviews and reports by the Commission and EBA. Transposition is required by 8 July 2021, with application by 8 July 2022.
