Capital Markets

Local Currency Bond Markets, Covered Bonds, Mortgage-backed Securities

My key professional expertise in capital markets is in covered (mortgage) bonds and mortgage-backed securities (MBS).

In the 1990s, I worked closely with the German Mortgage Bank Association, the guardian of the Pfandbrief, as a legal-regulatory policy advisor – especially on EU regulatory affairs. On staff of the Capital Markets Development Department of World Bank around 2000 I was responsible for mortgage capital market development and advised inter alia Eastern European countries, Brazil and the Philippines. In 2002 I performed a critical assessment of the U.S. agency / MBS public guarantee system centered on the ‘government-sponsored enterprises’ Fannie Mae and Freddie Mac. In 2006 I became a member of the EU Mortgage Funding Expert Group which was tasked with the development of mortgage-related securities markets at a time when mortgage and related ‘agency’ bond markets were about to eclipse government bond markets in the U.S..

Over the years, I have been responsible for many legal-regulatory analyses, law-making exercises and feasibility studies in emerging capital markets that included the development of Turkish (2004), Uruguayan (2008), Armenian (2015) and Georgian (2019) covered bond legislation. I designed a comprehensive covered bond training course for EBRD in 2012. I have assisted Armenia and Georgia in identifying and structuring multi-issuer solutions for covered bond issuance.

During the GFC, which originated partly in excessive mortgage capital market development, I wrote the first critical assessment of the German covered bond system following the crisis of 2008 and became involved in the the U.S. covered bond law debate ca 2010 after the collapse of the mortgage-backed securities markets there.

Mortgage capital markets has been through these decades a particularly embattled area of mortgage finance. My approach has always been to analyze and design instruments and institutions strictly on the basis of their merits in terms of generating value for investors, raising long-term funding and managing risk for issuers / mortgage lenders as well as minimizing contingent liabilities for taxpayers.

Selected project references local currency bonds / covered bonds / mortgage-related securities

2019“Drafting of Covered Bond Legislation for Georgia”, including innovative pass-through covered bonds, BRRD-compatible implementation design.

“Feasibility study for a Covered Bond Issuing Centralized Mortgage Refinancing Company”, including implementing regulations, governance documentation.
Asian Development Bank, Manila / National Bank of Georgia
2018“Feasibility Study on Covered Bond Legislation for Georgia”Asian Development Bank / National Bank of Georgia
“Proposed Mortgage Market Development Program in Uzbekistan”, including legal and regulatory reform roadmap for primary and secondary mortgage markets (with Centil Law Firm).
Asian Development Bank
„Institutional and Program Development of State Mortgage Company in Kyrgyzstan”, including review of capital market legislation and support for SMCs inaugural collateralized bond issuance.State Mortgage Company Kyrgyzstan, Kreditanstalt für Wiederaufbau
2014/15“Reformulation of the Armenian Covered Bond Law.”
“Feasibility Assessment of a Multi-Issuer Facility for Mortgage Covered Bonds in Armenia.”
Kreditanstalt für Wiederaufbau /
Central Bank of Armenia
2014“Liquidity Risk of Covered Bonds – Assessment of the EBA’s Empirical Approach to the Calibration of the Liqudity Coverage Ratio (LCR)”Danish Mortgage Bank Association (Realkreditraadet)
2014“Pre-Feasibility Study for the Introduction of Mortgage Covered Bonds in Armenia”Kreditanstalt für Wiederaufbau /
Central Bank of Armenia
2012/13“Identification of Sales Story for Covered Bond IT Solutions for Transition Countries”, with special focus on Russian covered bond and mortgage-related securities markets.
[in German]
German private sector client
2012„Principles of Covered Bonds Training Program“, including comprehensive training course on covered bonds – system genesis, legal-regulatory/rating, issuer and investor financial economics, crisis response.European Bank for Reconstruction and Development
2011/2012“Mortgage Regulation Policy Dialogue with Selected Countries in the CEE and SEE regions”, including covered bond reform options review in Hungary, Romania, review of options for introduction of covered bonds in Croatia, Serbia.European Bank for Reconstruction and Development
2010“U.S. Covered Bond Legislation Proposal”, commentary and European best practice discussion regarding the bill proposed by Congressman Garrett on March 18, 2010.Absalon  – Joint venture George Soros Corporation, New York, und VP Securities (Denmark).
2010Study on the German Pfandbrief System – Crisis Diagnosis and Reform Proposal” , comprehensive analysis of the contribution of the Pfandbrief system to the German financial crisis. [in German]Green Party in German Bundestag
2008“Covered Bond Law and Related Mortgage Sector Legislation”, discussion and drafting of law proposal.World Bank, National Housing Agency/Uruguay
2006“Mortgage Funding Expert Group, Expert Member”, evaluation of regulation / harmonization proposals in the area of covered bonds and other mortgage-related securities.Directorate General  Markt of the European Commission
2004-2006“Housing Finance Legal Reform Program for Turkey”, discussion and drafting of legislation for covered bonds, secondary market institutions, mortgage consumer law and other regulations.Capital Markets Board/ Turkey, Subcontract with Deloitte, funded by World Bank
2002Scope and Effects of Public Guarantees in Housing Finance –
the Case of the U.S. Government-Sponsored Enterprises
Fannie Mae and Freddie Mac”
Verband deutscher Hypothekenbanken
1991-2004Several consulting assignments for German mortgage bank association (now Association of German Pfandbrief Banks)Verband deutscher Hypothekenbanken

Selected presentations local currency bonds / covered bonds / MBS

Institutional Detail Swiss Centralized Refinancing Companies”, Paper prepared under the project with the National Bank of Georgia / Asian Development Bank with the support of Pfandbriefbank schweizerischer Hypothekarkreditinstitute, February 2019.

Centralized Mortgage Refinancing and Local Currency Bond Funding – Governance Case Studies from Developed and Developing Markets”, Workshop held at the National Bank of Georgia, April 2019

Mortgage Capital Market and Access to Credit Instruments with special focus on Covered Bonds and Contract Savings for Housing“, Workshop held at the National Bank of Georgia, June 2018