An EBA report outlining recommendations on European Secured Notes (ESNs) that was initially due to be delivered this week has been delayed, with a new deadline of 30 June set, despite the European Commission having been itself due to move on ESNs in the second quarter.

The European Commission announced in June 2017 that it will assess the case for developing ESNs – a proposed covered bond-style product for the financing of SME and infrastructure loans.

In October the Commission then invited the European Banking Authority (EBA) to give recommendations on key aspects of the potential features, regulatory treatment and encumbrance impact of the product. The Commission said at the time that in order to complete its ESN feasibility assessment by a deadline of the second quarter of 2018, it would need to receive EBA’s final report by 30 April – this past Monday.

However, the report has not been delivered, and in a letter to EBA chairperson Andria Enria (pictured above, right) dated 1 March, Olivier Guersent, director-general, Financial Stability, Financial Services and Capital Markets Union, European Commission (left), confirmed that the deadline for the delivery of the final report has been extended to 30 June.

An EBA spokesperson told The CBR that the report would be made public “very soon after”.

The spokesperson said the EBA plans to hold a public hearing on ESNs towards the end of June, and will hold numerous external meetings between EBA staff and industry stakeholders before finalisation of the report.

Some market participants have expressed scepticism about how much progress will be made on establishing ESNs in the short term.

The Commission is meanwhile moving ahead working to finalise its planned Directive, from which it is excluding ESNs and related collateral.

Photo credits: Olivier Guersent – European Commission/EU; Andria Enria – EBA