Protected: yes Effective: maybe

Europe's covered bond market is fast developing: each country that passes legislation to enable the issue of such bonds learns something from those that have gone before. But, as Philip Moore reports, this is leaving the original home of covered bonds, Germany, with a tired product

The good news for the European covered bond market is that there have been a number of positive developments in recent months; the bad news is that virtually none of these has emanated from the German Pfandbrief sector which, as comfortably the largest of Europe’s covered bond markets, continues to cast a lengthy shadow over the asset class as a whole.

The issuance figures in 2002 for these heavily collateralised bonds tell the story plainly enough. According to figures published recently by