The European Commission (Commission) has issued a call for advice to the European Banking Authority (EBA) in relation to European Secured Notes (ESNs). In the call for advice, the Commission invites the EBA to assess the following aspects:

• the extent to which best practices identified in the EBA’s Report on covered bonds – Recommendations on harmonisation of covered bond frameworks in the EU could be applied to ESNs with appropriate modifications;
• the appropriate risk treatment of ESNs given their features and expected risk-return profile; and
• the effects ESNs could have on individual banks in terms of assets encumbrance impact on unsecured bank creditors.

The Commission intends to complete its assessment of ESNs by Q2 2018. The Commission therefore would like to receive the EBA’s final report by 30 April 2018.

View European Commission’s call for advice on European secured notes, 3 October 2017