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Article: FDIC And Treasury Department Guidance May Spur Growth Of U.S. Covered Bond Market.(Federal Deposit Insurance Corporation)
- Article from:
- Mondaq Business Briefing
- Article date:
- August 15, 2008
CopyrightCOPYRIGHT 2008 Mondaq Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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In response to the developing housing turmoil and credit crisis, which continues to restrict the securitization of residential mortgage loans, U.S. federal regulators have issued guidance regarding a potential alternative method of on-balance sheet financing of these loans--covered bonds. The four largest U.S. banks have publicly announced their intention to establish covered bond programs, which, as Treasury Secretary Henry Paulson noted on July 28, "have the potential to increase mortgage financing, improve underwriting standards, and strengthen U.S. financial institutions by providing a new funding source that will diversify their overall portfolio." Although ...