In May 2007, the Bank of Italy issued supervisory regulations for Italian covered bonds (obligazioni bancarie garantite). These regulations provide the long-awaited legislative and regulatory framework which will now allow Italian banks to issue covered bonds.
Covered bonds are a type of banking senior debt securities – already regulated in most European Union (EU) countries – whose key feature is that they are guaranteed not only by the general assets of the issuing bank but also by a segregated cover pool of high credit quality assets (typically claims arising from mortgage loans and claims due or guaranteed by public administrations).
