CityGuy

I heard Europe has had covered bonds for a long period of time and that these bonds help stabalize their economy because they are large and liquid enough to generate interest from large investment funds.

So why are covered bonds not in the U.S?

SwimCoach

this is an interesting off topic discussion ....

a covered bond is a bond issued by a bank and backed by a dedicated group of loans
kept on the issuing bank's balance sheet. The banks balance sheet leaves less risk that the bank will ignore prudent lending standards. The loans that "cover" the bond are also highly regulated. They are monitored by independent third parties and must be of high quality.

In Europe they are large and an important tool for banks to fund themselves.

Why the US does not issue or use cover bonds is a reason i do not know for sure. My assumption is that what is missing in the U.S. is a mechanism for channeling enormous global pools of capital into our long-term infrastructure development.

PaullyInNYC

my question is why do you care? is this a simple educational question or do you plan on changing our society?