Covered bonds are traditionally backed mainly by residential mortgages and public-sector loans. However, European Secured Notes are new types of covered bonds that are backed by loans to small and medium enterprises.
Key learning objectives:
Explain the new asset class and its disadvantages
Identify cases whereby ESNs have been mirrored before, and the people most likely to use it today
Describe the structural differences between ESNs and traditional covered bonds
Outline the success prospects of ESNs and what it depends on
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