Basically, you could have known that one day it would be payday. European commercial banks now have to repay billions in coronavirus loans to the European Central Bank. According to Blumberg, 250 billion euros in repayments are due this week alone. The question now is: how can this gigantic gap be financed? Naturally, the European commercial banks come up with the best of the best solutions: covered bonds! We are familiar with these products from the last financial crisis; they are quickly issued bonds backed by assets that give them the appearance of creditworthiness. For example, mortgage loans and other assets inflated by the expansionary monetary policy inflation mechanism. In order for this camouflage to work, the ECB will be forced to reinflate the corresponding collateral. So have fun to all those who are planning to buy a house in the eurozone in the coming years.

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