The world’s biggest investors are warning that a plan to introduce new collateral into the $3.5 trillion covered bond market risks undermining the safety of securities pioneered in 18th-century Prussia.
BlackRock Inc. said using loans to small- and medium-sized companies, or SMEs, to back the securities rather than safer real estate or public-sector debt may devalue the asset class.
BlackRock sounds alarm on covered bond collateral
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