Our team in Lithuania, Latvia and Estonia, together with the European Bank for Reconstruction and Development (EBRD) and Richard Kemmish Consulting Limited, have presented their final report on the development of a pan-Baltic legal and regulatory framework for covered bonds. This is a significant step towards creating unified Baltic covered bond regulation, which will provide more opportunities to attract investment.

On the basis of the recommendations, the Baltic states will have to adjust their national legislation regulating covered bonds. Unanimous harmonization of laws will create an attractive new instrument for foreign investors where issuing covered bonds could involve banks using assets from all three states as underlying assets.

Combines the advantages of the Baltic States

Says Lithuanian Finance Minister, Vilius Šapoka: “This initiative is only one of the instruments to link the advantages of the Baltic states to overcome the challenges often faced by smaller countries. Unified legal regulation and the introduction of new financial instruments will create conditions for new international investors to enter the region and increase the competitiveness of the Baltic states on financial markets. This will also contribute to the economic growth, job creation and stability of financial markets.”

Another instrument – securitization – is also envisaged to create a single Baltic capital market. In Estonia, the Covered Bonds Act was adopted in February 2019, while in Lithuania the legislation is still under preparation.

The final EBRD report on development of a common three-country covered bond system is available here.

Our team

Our international team contributing to the report: