In general, securities with double protection for the investor, namely – through the liability of the issuing institution and – coverage by a security pool. – In Germany, covered bonds (Pfandbriefe), claims on the state and other items listed in detail in § 20a of the German Banking Act (KWG). Their advantages for investors are – their fixed and known maturity, – their additional security due to special legal provisions, and – their high liquidity: the securities can be sold quickly and also borrowed against. In this respect, they can hardly be replaced by asset-backed securities. – See central bank’s own portfolio. – Cf. ECB Monthly Bulletin of February 2008, p. 91 (ABSs are in demand from different investors than covered bonds), Deutsche Bundesbank Monthly Bulletin of August 2009, p. 46 (ECB purchases of covered bonds; overviews), ECB Monthly Bulletin of August 2010, pp. 34 et seq. (market developments since 2008; overviews, including maturities), ECB Annual Report 2010, p. 111 (ECB purchases of covered bonds), ECB Monthly Report of November 2011, pp. 82 et seq, p. 86 ff. (covered bonds in the refinancing structure of banks; overviews), ECB Monthly Bulletin of December 2011, p. 44 (more recent figures).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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