Yearly Archives: 2015

The Volcker Rule and Covered Bonds

The Volcker Rule became effective on July 21, 2015. There are two aspects to the Volcker Rule: a prohibition on proprietary trading and a limitation on sponsoring or investing in a ‘covered fund.’ It is this second aspect of the … Continue reading →

Why is CB legislation tied to GSE reform?

Why is the adoption of covered bond legislation linked to housing finance reform? Housing finance reform is all about the role of the GSEs. While covered bonds certainly can be used to finance residential mortgage loans, they do not require … Continue reading →

Why do investors like covered bonds?

Why do investors like covered bonds? What is it about covered bonds that investors like? Even U.S. investors who have plenty of other fixed income investment opportunities. In Europe there is more than €2 trillion in covered bonds outstanding. Even … Continue reading →

Why not covered bonds?

Why not covered bonds? Why not pass legislation for covered bonds in the United States? It is easy to do and there is basically no cost to the Treasury. In 2011, covered bond legislation passed the House Financial Services Committee … Continue reading →