Regulatory Alerts2022-06-21
Ordinance No 42 of the BNB on the Terms and Procedure for Issuance of Covered Bonds
The Bulgarian National Bank issued Ordinance No 42 to establish detailed requirements for calculating covered bond liabilities and cover assets, conducting periodic stress tests, and appointing cover pool monitors. The regulation mandates specific valuation methods for tangible assets and derivative contracts, requiring issuing banks to maintain robust risk management frameworks and adhere to strict liquidity and overcollateralization standards. It further defines the eligibility criteria for cover pool monitors, including mandatory insurance coverage, and sets out procedures for reporting stress test results and addressing shortfalls in the cover pool.
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