SIFMA Supports The Creation Of A U.S. Covered Bond Market

The Securities Industry and Financial Markets Association (SIFMA) today issued the following statement on H.R. 5823, the United States Covered Bond Act of 2010, from Sean Davy, managing director and leader of SIFMA’s U.S. Covered Bond Council:

“SIFMA supports the development of a covered bond market in the U.S. and applauds the action taken by the House Financial Services Committee today. Covered bonds can provide a substantial and stable source of long term private capital and liquidity to fund mortgage, public-sector, and small business loans. In doing so, this product has the ability to positively impact our financial system by providing an alternative source of funding and, in turn, increase the availability of consumer credit.

“H.R. 5823 provides the legal framework necessary to develop a liquid and efficient covered bond market in the U.S. It also provides investors with the certainty they need to support the market and is consistent with several policy objectives including increased transparency and uniformity, and the desire for issuers to have ‘skin in the game’.

“Covered bonds represent an untapped and proven resource to provide liquidity to our credit markets, an essential benefit in the current constrained environment. SIFMA looks forward to working with Congress on a legislative framework for U.S. covered bonds that provides the legal certainty and the public supervision needed for a deep and liquid market to develop.”