Second, there are information synergies between the oversight of payment systems and the supervision of banks. The ECB is not only responsible for the oversight of all large-value payment systems operating in the euro area, but also the owner of the TARGET2 system, the largest of such systems. Third, central banks have a lot of expertise on the financial sector.
As you know, SDOs are subject to the condition that the value of the individual loan must never exceed 80 per cent of the underlying collateral. If house prices go down, the mortgage banks must pledge top-up collateral. One way of financing this is by issuing less collateralised junior covered bonds. The proceeds are used to buy e.g.