Focus on Covered Bonds: Retained Covered Bonds – Swiss Army Knife or Boomerang?

Retained covered bonds are playing an increasingly significant role in banks' refinancing strategies. Their nature as a 'Swiss Army knife' comes from liquidity, collateral and access to refinancing. However, a 'boomerang' effect can arise from changes in the regulatory framework and the sudden emergence of idiosyncratic risks. In the long term, a balanced approach is essential.