This can best be achieved by implementing legislation that allows both banks and mortgage-credit institutes to issue covered bonds – to ensure a large number of home-financing intermediaries, including major players – and by enabling the product development to take place within a framework that continues to ensure safe and transparent home financing at wholesale market rates.
This calls for a thorough review of the future regulations, including their implications, to establish a legal basis for covered bonds that provides a safe and secure home-financing system based on giltedged bonds. Competition is a good thing. The development of new products in the financial system is clearly subject to fierce competition. Success stories about price competition emerge from time to time.