February 2011 - Gruppo Banca Carige

Italian Covered Bond Legal Framework (1/2)Name of the instrument (s)LegislationSpecial banking principleRestriction on business activityAsset AllocationInclusion of hedge positionsObbligazioni Bancarie GarantiteLaw 80 of 14 may 2005, amending Article 7-bis & 7-ter of law 130/1999, Ministry ofEconomy & Finance regulation 310 dated 14 December 2006 and Bank of Italy instructionsissued on 17 may 2007 and on 24 Marcgh 2010No: any Italian bank fulfilling specific issuance criteriaN/ACover assets are segregated through the transfer to a separate entityHedge position are part of the structural enhancements intended to protect bondholdersSubstitute collateral Up to 15%Restrictions incl. CommercialmortgagesGeographical scope for publicassetsGeographical scope formortgage assetsNoEEA states and Switzerland, subject to a maximum risk weighting of 20% and up to 10% ofthe cover poolNon-EEA states or local authorities subject to a maximum risk weighting of 20%EEA and SwitzerlandLTV barrier residential 80%LTV barrier commercial 60%Basis for valuationValuation CheckSpecial SupervisionMarket value. The approach needs approval from Bank of Italy and is verified by anindependent auditorSemi-annual review and annual reporting to the Bank of ItalyBank of ItalyGRUPPO CARIGE 45