IdesofMarch
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A rate of 3.28% is 1.48% higher than 1.8%.
1.48% is 82/100 of 1.8%
In other words the Irish average rate is 82% higher than the Eurozone average rate.
You appear to be confusing covered bonds with something else, because that's not how covered bonds work. The mind boggles indeed.In Ireland, the banks also issued a large proportion of covered bonds in respect of these mortgage loans, so the Irish banks were merely the loan originator and servicer and not the beneficial owner of the mortgage loan (whether these mortgages be profit or loss making), so these loans would not impact on profit and loss, the mind boggles!
Yes , this is correct, the banks would tell you that this extortionate interest rate is due to NPL's and associated costs, but the NPL's would, at a maximum, only account for a 15% higher Irish interest rate than the Eurozone average rate.
In a covered bond, the ownership of the mortgage remains with the lender, but it's given as security. In other words, even if the mortgages go bad, the bank still owes the money to the bond owner
However, I have not really understood why Irish banks lost so much when they had securitised so much of their mortgage book.
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