US covered bond rules are welcome, but the obstacle is price

Yesterday was a big day for the US covered bond market, with the release of a Best Practices Guide by the US Treasury, with a fanfare designed by Hank Paulson to show top banks were backing the product. But a lack of guidelines has not been the market’s main problem — it is that investors are not so far offering issuers pricing that is attractive enough to get the market started. When a new deal establishes that level, the celebrations will really be justified.