With the establishment of Liechtensteinisches Pfandbriefinstitut AG (LPBI), the Liechtenstein financial centre is breaking new ground. For the first time, Liechtenstein banks can jointly issue covered bonds.
The first covered bond was issued in spring 2026. Behind this step lies not only new legislation, but above all a technological foundation without which a licence would not have been possible.
The new Covered Bonds Act, which came into force in Liechtenstein in February 2025, establishes the legal framework. However, the Liechtenstein Financial Market Authority (FMA) ties the licence to clear operational requirements: the cover pool — the high-quality mortgages securing the covered bond — must be correctly structured, monitored and transparently reported at all times. Transparent, audit-proof and in real time. This is where it becomes clear how decisive technology has become for modern capital market instruments. Without a consistently functioning platform, the regulatory complexity can hardly be managed. Put differently: the covered bond no longer begins on paper today — it begins in the system.
A shared platform for banks and the institute
LPBI and its member banks use an end-to-end software solution covering the entire lifecycle of the cover pool. This was developed over the past two years specifically for this use case. On the banks' side, the underlying collateral and mortgage receivables are managed digitally, reviewed and made available for the covered bond. At the covered bond institute, this information is consolidated and used for reporting.
What matters is not the individual functionalities, but how they work together: banking systems, regulatory requirements, investor demands and capital market processes interlock seamlessly. The platform thus forms the operational backbone of the new covered bond market.
From licence to first issuance
With the licence granted in spring 2026, the technical foundation has now been officially recognised. The productive cover pool was established and Moody's assigned the Liechtenstein covered bond an AAA rating. On this basis, a first issuance was placed.
For the Liechtenstein financial centre, this is an important milestone. For the participating banks, it means additional refinancing options. And for the technology behind it, it is the real-world test under live market conditions.
"The regulatory requirements for covered bonds are high, and rightly so. For us, it was crucial to choose a platform that not only works today, but is also equipped to handle future regulatory and market developments," says Dr Georg Stöckl, CEO, Liechtensteinisches Pfandbriefinstitut AG.
Technology as a regulatory prerequisite
The software solution deployed was developed by FINNOFLEET Schweiz AG, a leading software provider for credit and refinancing processes. It meets the regulatory requirements for the construction, maintenance and monitoring of the cover pool and is an integral part of the covered bond model. This makes one thing clear: those wishing to issue covered bonds need more than capital. They need systems capable of supporting it.