Brexit poses threat to UK covered bond market – Moody’s

Rating agency Moody’s has warned Brexit poses a threat to UK’s covered bond market, an asset class which is treated favorably by European regulators.

UK covered bonds, which are issued by banks to fund their businesses, may lose the preferential treatment they receive under EU law if the UK leaves the European Union – a potential credit negative, the ratings agency said.

Upon a Brexit, regulatory treatment of covered bonds would continue to be governed by international requirements such as the Basel rules, but these rules do not treat covered bonds as favorably as the EU’s rules,” Moody’s said in a note today.

Rating agency Moody’s has warned Brexit poses a threat to UK’s covered bond market, an asset class which is treated favorably by European regulators.

(Market News Provided by FXstreet)

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