http://www.reuters.com/article/newsOne/idUSWEQ00007020080728
WASHINGTON (Reuters) - U.S. Treasury Secretary Henry Paulson said the nation's four biggest banks were ready to kick-start a market for covered bonds that could help significantly expand home mortgage financing.
"I believe covered bonds have the potential to increase mortgage financing, improve underwriting standards and strengthen U.S. financial institutions by providing a new funding source," Paulson said in prepared remarks for a press conference on Monday.
Covered bonds, issued by banks and secured by pools of assets like home loans, are widely used in Europe but have only become attractive in the United States since the segment of the mortgage securitization market driven by investment banks dried up last year amid a wave of foreclosures.
http://www.portfolio.com/views/blogs/market-movers/2008/07/08/what-is-a-covered-bond Covered Bonds Explained
http://en.wikipedia.org/wiki/Covered_bonds
http://europe.pimco.com/LeftNav/Bond+Basics/2006/Covered+Bond+Basics.htm Pimco explains covered bonds
http://www.iht.com/articles/2007/11/22/bloomberg/bxloan.php German banks agreed Thursday to suspend trading in pfandbrief mortgage bonds to "calm down" the market following a slump that has shut down trading in the securities, which are the biggest source of funds for home lenders in Europe.
The Association of German Pfandbrief Banks, an industry group that represents securities firms and borrowers in the $1.3 trillion German market, was following advice Wednesday from the European Covered Bond Council to withdraw from interbank trading until Nov. 26.
