Select Framework(s)
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- Australia
- Australian Covered Bonds
- Austria
- FBS - Fundierte Bankschuldverschreibungen
- Pfandbriefe
- Belgium
- Belgium Covered Bonds
- Brazil
- Brazil Covered Bonds
- Bulgaria
- Bulgarian Covered Bonds
- Canada
- Canadian Covered Bonds
- Chile
- Bonos Hipotecarios (BH) - Chilean Covered Bonds
- Cyprus
- Cypriot Covered Bonds
- Czech Republic
- Czech Republic Covered Bonds
- Denmark
- Realkreditobligationer - RO
- Særligt Dækkede Obligationer - SDO
- Særligt Dækkede Realkreditobligationer - SDRO
- Estonia
- Estionian Covered Bonds
- Finland
- Finnish Covered Bonds
- France
- Caisse de Refinancement de l'Habitat - CRH
- General Law Based CBs
- Obligations Foncières - OF
- Obligations à l'Habitat - OH
- Germany
- Pfandbriefe
- Greece
- Greek Covered Bonds
- Hungary
- Hungarian Covered Bonds
- Iceland
- Icelandic Covered Bonds
- Ireland
- Asset Covered Securities - ACS
- Italy
- Obbligazioni Bancarie Garantite - OBG
- Luxembourg
- Lettres de Gage hypothécaires
- Lettres de Gage mobilières
- Lettres de Gage mutuelles
- Lettres de Gage publiques
- Netherlands
- Dutch registered CBs programmes
- New Zealand
- New Zealand Covered Bonds
- Norway
- Norwegian Covered Bonds
- Poland
- Polish Covered Bonds
- Portugal
- Mortgage CB (Obrigações Hipotecárias)
- Public Sector CB (Obrigações sobre o Sector Público)
- Romania
- Obligatiuni Ipotecare - Mortgage Covered Bonds
- Russia
- Mortgage Obligations
- Singapore
- Singapore Covered Bonds
- Slovakia
- Slovakian Covered Bonds
- Slovenia
- Slovenian Covered Bonds
- South Korea
- South Korean Covered Bonds
- Spain
- Cédulas Hipotecarias - CH
- Sweden
- Swedish Covered Bonds
- Switzerland
- Swiss Pfandbriefe
- Contractual Covered Bonds
- Credit Suisse CB
- UBS CB
- Valiant
- Turkey
- Turkish Covered Bonds
- United Kingdom
- Regulated Covered Bonds - RCB
- Unregulated Covered Bonds
- United States
- US Covered Bonds
Select Chapter(s)
- I. STRUCTURE OF THE ISSUER
- II. FRAMEWORK
- III. COVER ASSETS
- IV. VALUATION OF THE MORTGAGE COVER POOL & LTV CRITERIA
- V. ASSET-LIABILITY GUIDELINES
- VI. COVER POOL MONITOR & BANKING SUPERVISION
- VII. SEGREGATION OF ASSETS & BANKRUPTCY REMOTENESS OF COVERED BONDS
- VIII. RISK WEIGHTING & COMPLIANCE WITH EUROPEAN LEGISLATION
- IX. ADDITIONAL INFORMATION
Questions | Finnish Covered Bonds |
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I. STRUCTURE OF THE ISSUER | |
1. Who is the issuer? |
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2. Does the bondholder have recourse to the credit institution? |
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3. Who owns the cover assets? |
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(1) Comments: "Credit institution, but pledged to the issuer" in the case of "intermediary credits". | |
4. Is the issuer the originator of the assets? |
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(2) Comments: "No" in the case of "intermediary credits" or in case the assets are bought by the issuer from other credit institutions. | |
II. FRAMEWORK | |
1. Are the bonds governed by a special covered bond Legislation? |
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2. What is the legal framework for bankruptcy of the issuer of covered bonds? |
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(3) Comments: The Covered Bond Act contains certain provisions that specifically apply in the case of a covered bond issuer's bankruptcy, but the general framework of the bankruptcy procedures is set out in the Bankruptcy Act. | |
III. COVER ASSETS | |
1. What types of assets may be included in cover pools? |
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2. What is the geographical scope for public sector assets? |
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3. What is the geographical scope for mortgage assets? |
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4. Are regular covered bond specific disclosure requirements to the public mandatory? |
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IV. VALUATION OF THE MORTGAGE COVER POOL & LTV CRITERIA | |
1. LTV is calculated using which valuation?[4] |
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(4) Comments: Market value at the moment of granting mortgage loan. The issuer shall quarterly follow the development of the market values of the collateral for mortgage loans as provided in the Financial Supervisory Authority's (« FIN_FSA ») regulations, for example using the statistical method. Application of a statistical method requires that threshold values are set for price changes; if the threshold value for a price drop is crossed, the supervised entity shall in its own systems without delay update the fair value of individual collateral. If the value of shares or real estates placed as collateral of commercial property credits and housing loans exceeds EUR 3 million, a valuation statement by an independent and external real estate evaluator approved by the Central Chamber of Commerce shall be acquired. | |
2. Are there any special LTV limits used solely for calculating collateralisation rates for the cover pool (if yes, specify)? |
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3. Do bondholders get the benefit of that portion of the loan which exceeds the LTV cap? |
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(5) Comments: Pari passu with other unsecured creditors. | |
4a. Is there an LTV cap which makes the entire loan ineligible to be put in the cover pool (if yes, specify)? |
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(6) Comments: LTV of the original loan can be up to 100% (for residential loans a 90% recommendation by the FIN-FSA) but only 70% (residential) /60% (commercial) LTV of that loan is Cover Pool eligible. | |
4b. Is there an LTV cap which would require a loan to be removed from the cover pool? |
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5. Is there any additional LTV limit on a portfolio basis? |
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(7) Comments: No Portfolio specific LTV limits. | |
V. ASSET-LIABILITY GUIDELINES | |
. Exposure to market risk | |
1. Is exposure to market risk (e.g. interest rate, currency risks) required to be mitigated by law or contract? |
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2. What is the primary method for the mitigation of market risk? |
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3. If the answer to the above question on market risk mitigation is “Use of derivative hedge instruments”, please specify whether those instruments are entered into: |
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4. What type of coverage test is applied? |
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(8) Comments: The total amount of collateral of covered bonds shall continuously exceed the remaining combined capital of the covered bonds. The net present value of the total amount of collateral of covered bonds shall continuously exceed by at least 2 per cent the total net present value of the payment liabilities resulting from the covered bonds. | |
5. What is the frequency of coverage calculations? |
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6. What types of stress scenarios are applied? |
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7. What is the frequency of stress test calculations? |
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(9) Comments: The issuer shall further ensure that the total amount of interest accrued from the assets calculated in the total amount of collateral, during any successive period of 12 calendar months, is sufficient to cover the total amount of interest payable to holders of covered bonds and payments to counter-parties in derivative contracts during the same period. | |
. Exposure to liquidity risk | |
8. Is exposure to liquidity risk required to be mitigated by law or contract? |
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9. What is the primary method for the mitigation of liquidity risk on interest payments? |
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10. What is the primary method for the mitigation of liquidity risk on principal payments? |
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11. Is there any grace period in case of a breach of liquidity risk mitigants? |
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(10) Comments: If not otherwise advised by FIN-FSA. | |
12. What is the consequence of not fixing a breach of liquidity risk mitigants? |
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(11) Comments: Cancelling the licence (FIN-FSA). | |
. Monitoring of exposures to market and liquidity risk | |
13. Who monitors the maintenance of coverage tests? |
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14. Are there any regular public reporting requirements for market and liquidity risk? |
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(12) Comments: Reports only to FIN-FSA. | |
. Overcollateralisation | |
15. Is mandatory minimum overcollateralisation required? |
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(13) Comments: "By contractual obligation" varies among the different issuers. | |
16. What is the level of minimum mandatory overcollateralisation? |
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(14) Comments: 2% of the Net Present Value by the law and issuer/programme specific levels. | |
17. If mandatory overcollateralisation is required, are the amounts above the minimum OC level protected? |
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18. Is there any grace period in case of a breach of the coverage test? |
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(15) Comments: If the collateral of a covered bond does not fulfill the requirements provided for in the Covered Bond Act, the FIN-FSA shall set a time period within which the issuer shall acquire more collateral in accordance with the law. | |
19. What is the consequence of not fixing a breach of the coverage test? |
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(16) Comments: Cancelling the licence (FIN-FSA). | |
VI. COVER POOL MONITOR & BANKING SUPERVISION | |
1. Is a special license required for the issuing of covered bonds? |
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2. Are there special reporting duties of the covered bond issuer to the supervision authority concerning covered bonds and the cover pool, which go beyond the regular banking supervision? |
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3. What is the role of the banking supervision regarding covered bonds? |
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(17) Comments: Eligibility criteria, requirements for the quality of cover assets, limitations on exposure to market and liquidit risks and overcollateralisation requirements are all set out in the Covered Bond Act (608/2010) and the Credit Institutions Act (610/2014) contains provision about evaluation of operational risk; the FIN-FSA shall supervise compliance (strictly speaking not "check", "monitor" or "evalutate") with both acts and provisions issued under them. | |
4. Is there a special role of banking supervision in crisis regarding covered bonds? |
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5. Is there a cover pool monitor independent from the issuer? |
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(18) Comments: Issuer monitors the Cover Pool and reports it to FIN-FSA. FIN-FSA audits the cover pool. | |
6. If there is an independent cover pool monitor, what are its duties? | |
(19) Comments: n.a. | |
VII. SEGREGATION OF ASSETS & BANKRUPTCY REMOTENESS OF COVERED BONDS | |
1. Do covered bonds automatically accelerate when the credit institution goes insolvent? |
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2. What is the cover pool? |
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(20) Comments: All cover assets in the cover register. | |
3. How are the covered bondholders protected against claims from other creditors in case of insolvency of the issuer? |
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4. Is there recourse to the credit institution’s insolvency estate upon a cover pool default? |
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5. Are there provisions that require derivatives to continue in case of insolvency of the credit institution? |
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(21) Comments: The bankruptcy administrator shall, on demand of the attorney (see VI.4) or by his permission, conclude derivatives contracts necessary for hedging against risks relating to covered bonds and the assets placed as their collateral. | |
6. If derivatives are permitted in the cover pool, what is their ranking? |
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VIII. RISK WEIGHTING & COMPLIANCE WITH EUROPEAN LEGISLATION | |
1. Does the covered bond fulfil the criteria of UCITS 52(4)? |
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2. For further information regarding the compliance to the criteria of Article 129 of the Capital Requirements Regulation (CRR), please see the following links: http://ecbc.hypo.org/Content/default.asp?PageID=504#position https://www.coveredbondlabel.com | |
(22) Comments: | |
3. Are listed covered bonds eligible in repo transactions with the national central bank? |
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(23) Comments: Also with the ECB. | |
4. Are there any special investment regulations regarding covered bonds? |
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IX. ADDITIONAL INFORMATION | |
1. Link to National Association representing covered bond interests |
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2. Link to national regulators and supervisors | |
3. Fact Book Country Chapter |
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4. Hypostat Country Chapter |
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