of other covered bond markets. since the primary market of european covered bonds had almost come to a halt, the aim of the cbpp has also been to support a revitalisation of the covered bond market. and indeed, issuance volumes and total outstanding amounts of covered bonds increased significantly shortly after the cbpp was announced. even so, this development is not necessarily the result of the programme, as other factors could have played a significant role. in particular, it is important to recall in this context that market conditions generally improved in 2009. on the other hand, it is also possible that, while the cbpp may have had a positive effect on the outstanding amounts of covered bonds, the programme had no effect on the outstanding amounts of bank bonds – both covered and uncovered. in this case, uncovered bank bonds would have been substituted by covered bank bonds. to sum up, the primary covered bond market has recovered well, as is also indicated by the very good performance of emissions during the first weeks of this year. there is another trend i would like to mention. during the last couple of months, a trend towards so - called sub - jumbo issues – 500 million to 1 billion euro – has emerged. according to market participants, this trend will probably continue and has the potential to change the nature of the covered bond market. since the beginning of 2009 the french, spanish and german covered bond markets have experienced most issues. in several european countries, german - style covered bond markets have been created. since the announcement of the cbpp, new issuers have entered the european covered bond market in various euro - area countries. some national markets – the italian for example – have seen a significant increase in the number of issuers and outstanding amounts. the broader distribution across various new countries and issuers will probably boost and further reinvigorate the covered bond once the financial crisis is over. 5. covered bonds securities lending since march 2010, the eurosystem has lent covered bonds held in its cbpp portfolio, responding to demand from eurosystem counterparties who wished to borrow such covered bonds against eligible collateral. beyond that, the bundesbank executive board decided to make not only its cbpp but also other own portfolio holdings of covered bonds available for the so - called automated securities lending programme by clearstream. the securities lending activity should help to support market liquidity, particularly in situations in which market making has been discontinued or dealers ’ limits for covered bond holdings have become tighter. this lending activity

joachim nagel : the bundesbank perspective on the pfandbrief market speech by dr joachim nagel, member of the executive board of the deutsche bundesbank, at the tokyo pfandbrief investor seminar 2011, tokyo, 26 january 2011. * 1. * * welcome ladies and gentlemen first of all, i would like to thank the association of german pfandbrief banks for giving me the opportunity to present the bundesbank perspective on the pfandbrief market to you. the motto of this event, “ the pfandbrief 2011 – return on investment in volatile times ”, suggests what is going on in financial markets. from my point of view as a central banker it is too early to give the all - clear, but nevertheless measures were set in motion to overcome the financial crisis. when the us subprime crisis disrupted the global capital markets in 2007, the european securitisation markets were also affected. that is why the pfandbrief and other covered bonds played a central role in european monetary policy, not only as collateral but also during the covered bond purchasing programme. but first of all, i will comment briefly on the special role of the pfandbrief on the european covered bond market. 2. pfandbrief in comparison with european covered bond products european covered bonds are very heterogeneous. the reasons for this are different legal systems and different market standards or traditions in certain financing segments. though there is a trend towards separate covered bond laws in most european countries, there are significant differences in terms of scope. the german pfandbrief act has the broadest scope and it is the strictest in many areas. for example, there are no derivatives in the underlying and the loan - to - value rules are the most conservative. its simplicity and transparency make the pfandbrief the benchmark for european covered bonds. the cover pool of a pfandbrief is of extraordinary quality, since structured products are excluded and cover assets are separated in the so - called “ cover pool register ”. the cover assets contained in this pool serve first to satisfy the pfandbrief creditors, and in the event of a pfandbrief bank ’ s insolvency do not participate in the insolvency proceedings. in order to engage in pfandbrief business, a specific licence is required demanding that issuers provide evidence of their intention