The majority of European fixed-income investors (87%) expressed concern over banks’ growing use of covered bonds, according to Fitch Ratings. Bridget Gandy, co-head of Fitch’s Europe, Middle East and Africa financial institutions group, said, “Holders of bank senior debt are understandably concerned about the growing use of covered bonds, given that these have a preferential claim over selected bank assets." Fitch predicts that covered-bond funding by Europe will likely “continue in the near future, fueled by invest risk aversion and regulatory incentives.”

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