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)
More on Structured Products
Securities Financing Transactions Regulation could conflict with Emir reporting rules
Banks face loss of attractive source of dollar funding
Head of Office of Capital Markets Trends calls on issuers to examine sales practices
Eurozone QE programme prompts wave of investor interest
Sign up for Risk.net email alerts
Sponsored video: MarketAxess
Sponsored video: Tradeweb
Multifonds talks to Custody Risk on being nominated for the Post-Trade Technology Vendor of the Year at the Custody Risk Awards 2014
Sponsored webinar: IBM Risk Analytics
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.