German banks agree to temporarily suspend trading in Jumbo covered bonds |
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Thu, 22 Nov 2007 15:02
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FRANKFURT (Thomson Financial) - German banks agreed to temporarily suspend trading in Jumbo Pfandbriefs, which are covered bonds with a volume of at least 1 bln eur, following the recommendation of the European Covered Bond Council (ECBC).'The ongoing massive disruptions on the international capital markets have also affected the markets for covered bonds, with increasingly negative repercussions for pricing on the European Jumbo Covered Bond market,' the Association of German Pfandbrief Banks said in a statement.'And although the Pfandbrief market is still proving to be very stable,' German banks are following the ECBC's recommendation 'in the interest of a uniform regulation of the covered bond market as a whole.'Interbank trading of Jumbo Pfandbrief will remain suspended until Monday.The Association of German Pfandbrief Banks comprises 33 members, including Hypo Real Estate Holding AG and Commerzbank AG's Eurohypo unit.The ECBC yesterday recommended suspension of interbank trading in covered bonds 'to avoid undue over-acceleration in the widening of spreads.'The ECBC said its 8-to-8 Committee, a platform of eight issuers and the European covered bond market's eighth largest market makers, will consult with peers ahead of its next meeting on Monday.maria.sheahan@thomson.commas/sljCOPYRIGHTCopyright Thomson Financial News Limited 2007. All rights reserved.The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
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