Spanish Cedulas Framework: Taming the bull
Download Document| Date Published | 2014 |
| Version | |
| Primary Author | Agustin Martin |
| Other Authors | |
| Theme | |
| Country | Spain |
Abstract
The purpose of this review is to align the Spanish cédulas framework, which has not had any major additions since 2008, with the EBA’s recommendations on best practice and to meet the necessary requirements to qualify as preferential capital treatment. Rating agencies and analysts have frequently pointed out the shortcomings of the Spanish cédulas framework during recent years, whereas most of the key European jurisdictions and non-European new entrants have either updated or addressed key points in their covered bonds frameworks such as: a) limitation/exclusion of commercial mortgages; b) LTV measurement and frequency of revaluations; c) liquid assets buffer; d) cover pool stress-testing; and e) independent cover pool monitors, among others.