Expect to hear and read this term much more often: "covered bonds."

The traditionally European asset class, designed to protect investors in the event of issuer collapses, could become a major source of financing in the US market, if the government has its way. On July 15, the Federal Deposit Insurance Corp.'s board of directors ratified a final draft of a policy statement on covered bonds. The FDIC published an interim policy statement on April 23, and most of the 130 letters from national banks, Federal Home Loan Bank members, industry groups and private citizens it received in response were supportive.

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