Market making in the European interbank covered bond market reopened this afternoon, after being closed since last week, but with new conditions imposed by its governing body, the European Covered Bond Council (ECBC).From now until December 14, market-makers will be compelled to make at least €5 million in markets to each other, at three times the normal bid/offer spreads, to keep liquidity high in the market. This compares to a previous minimum market of €15 million.
The ECBC closed the market on November 21 to damp down market volatility and prevent spreads from widening too far.
See also: Interbank covered bond market shuts down
Topics: European Central Bank (ECB)
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