A likely amendment to the Financial Stability Improvement
Act should encourage covered bonds in the US. If passed, the
rules will offer similar features to European covered bonds
Congressman Scott Garrett detailed an amendment to the Act
on Wednesday. Despite the fact that he
immediately withdrew it, there are encouraging signs that it
will pass and the plans have been well received.
The amendment is really quite good, said Jerry
Marlatt, structured finance partner at Morrison & Foerster.
In some ways it is very similar to much of the
legislation in Europe where, if the bank is insolvent, the
protected pool of assets is set aside....