The Federal Deposit Insurance Corporation's (FDIC)
depositor protection concerns over covered bonds have been
picked up by regulators in other parts of the world, according
to panelists at the American Securitization Forum's
2012 conference (ASF2012) last week.
Proponents of US covered bond legislation have
lobbied against the FDIC which says overcollateralisation risks
a disproportionate amount of assets being made unavailable to
depositors and creditors in a bank's insolvency.
The FDIC's views have historically been at odds
with the global standard. But this may be changing.
"I think the regulators in Europe are going to start
lowering the caps on covered bonds for the same reasons," said
panelist James Lockhart III of WL Ross & Co, referring to
the strengthening of...