On July 28, 2008 Treasury Secretary Paulson announced the publication of a Best Practices guide for U.S. covered
bonds, intended to promote covered bond issuances. Flanked by regulators, including the Chair of the FDIC, the OCC Comptroller, the Governor of the Federal Reserve, and representatives from large financial institutions,
Paulson stated that “covered bonds have the potential to increase mortgage financing, improve underwriting standards, and strengthen U.S. financial institutions by providing a new funding source that will diversify their
overall portfolio.” The Best Practices are intended as a complement to the FDIC’s Final Covered Bond Policy
Statement issued on July 15, 20081. In connection with Paulson’s announcement, four financial institutions, Bank
of America, Citigroup, JP Morgan and Wells Fargo announced plans to issue covered bonds.
The Best Practices establish a template for U.S. covered bond issuances and outline additional standards for
covered bonds that will bolster investor confidence in these instruments. We summarize below the principal
standards enumerated in the Best Practices.
See News Bulletin for more information.
Please see full publication below for more information.