Number: RS22925
Title: Covered Bonds: An Alternative to Securitization for Funding Mortgages
Authors: Edward V. Murphy, Government and Finance Division 
Abstract: Treasury Secretary Paulson has said that covered bonds could bring more certainty and more competition to mortgage markets. Because issuing banks do not sell mortgage assets to securitization trusts, accounting features of covered bonds may provide more readily accessible information to potential purchasers of the covered bonds and to the shareholders of the banks issuing the covered bonds. Some features of American banking regulations may have to be clarified to facilitate covered bonds. The Federal Deposit Insurance Corporation (FDIC), for example, issued a new rule clarifying its obligations to the holders of covered bonds if an FDIC-insured institution is placed in FDIC receivership or conservatorship.
Pages: 5
Date: Updated August 1, 2008