Posted To: Voice of Housing
By Mercy Jiménez Co-founder of Covered Bond Investor The much-anticipated Congressional hearing on covered bonds held December 15 appeared to show that even in the current polarized political environment, it is sometimes possible for both sides of the aisle to get behind a good idea. Covered bonds are a form of on-balance sheet financing that is widely used in Europe. Bondholders are protected by dual recourse — both to the issuer and to a “cover pool” of assets. Unlike securitization, with covered bonds any assets in a cover pool that deteriorate over time can be replaced or supplemented with better loans. Members of the House Committee on Financial Services, led by Chairman Barney Frank, took a look at covered bonds as a much-needed possible additional source of funding…(read more)
