Paulson may introduce covered bonds to mortgage market

07/23/2008 | Wall Street Journal, The

The Bush administration may adapt a bond-market invention popular in Europe into a fix for the mortgage-market meltdown. In Europe, banks secure so-called covered bonds with residential-mortgage loans originated by the issuing bank, keeping the pool of mortgages on its books. Treasury Secretary Henry Paulson is proposing a similar system for U.S. banks, but the idea may get a cool reception from the industry.

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