SMEs are a bad covered-bond collateral idea, BlackRock says

02/19/2013 | Bloomberg

Loans to small- and medium-sized enterprises should not be used as collateral in covered bond markets, according to BlackRock. "We should be very protective of the covered bond market because it's had certain features for so many years, including the resilience of the collateral, and it's a very safe asset class," said Jozef Prokes, a fund manager at BlackRock. "We don't think these are covered bonds."

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