The Commission welcomes the political agreement reached by the European Parliament and Member States on more proportionate and effective prudential rules for investment firms (IFR). This will help to improve investment flows across the EU and delivering better protection for investors.
The agreed rules aim to foster the development of covered bonds – financial instruments issued by banks to fund the economy – across the EU, particularly in those Member States where such markets have not yet developed. They will create a harmonised EU framework without disrupting already established and well-functioning national markets. By putting in place a cost-effective and long-term funding source, these rules will help financial institutions, in particular banks, to finance the real economy across the EU. These measures will also increase cross-border flows of capital and investments and promote harmonised prudential rules for those instruments, contributing to financial stability.
The Romanian Presidency and the European Parliament reached a provisional agreement on a harmonised framework for covered bonds. This framework will specify a common definition to receive an EU covered bond label and benefit from preferential capital treatment. The deal will now be submitted for endorsement by EU ambassadors.