Ottawa Issues Covered Bond Consultation Paper

Ogilvy Renault has reported Canadian Covered Bond Legislation Consultation Paper Released:

Following the Canadian Government’s announcement in its 2010 budget of its intention to introduce a legislative framework for covered bonds, the Department of Finance yesterday released its much anticipated consultation paper on the proposed framework.

In the consultation paper, the Government reiterates its objective of ensuring financial institutions have access to covered bonds as a funding source. It also acknowledges the increased importance of covered bonds to Canadian banks in recent years with issuances by Canadian financial institutions having increased to over $30 billion since the first covered bonds were issued by a Canadian bank in 2007. Further, the Government recognizes that the stability of financial institutions and the financial sector can be enhanced by providing funding options that are robust under stress and that a legislative framework for covered bonds will benefit Canadians.

It this wasn’t a PrefLetter Weekend, I’d be spending a lot more time on this … but I’ll have to leave that until later. From a quick glance, it does not appear as if Bankers’ Acceptances are intended to be covered by the legislation – they should be!

Covered Bonds were last discussed in the post US Covered Bond Legislation Moving Forward. A previous article discussed the question of BAs or BDNs: What’s the Difference?.

Hat tip to Assiduous Reader GA, who brought the Ogilvy Renault article to my attention.

Update, 2011-5-25: The consultation period ends 2011-6-10.

One Response to “Ottawa Issues Covered Bond Consultation Paper”

  1. […] mentioned on PrefBlog when it passed the Capital Markets Subcommittee. Consultations in Canada are taking place behind closed doors, as is only right and […]

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