It was not by chance that covered bonds were the first asset class to be purchased outright by the Eurosystem for monetary policy purposes in 2009. In addition, covered bonds make up a large share of the collateral that banks use to borrow funds in Eurosystem monetary policy operations, ensuring that banks have access to central bank funding.
Directors need to question growth rates in businesses and assess whether controls are keeping up with risks and if the business is resilient to shocks. This requires board members with expertise in banking, insurance and risk management. Boards also play an important role in ensuring that compensation systems are part of an integrated risk-management strategy.