FDIC drafts interim covered bond policy statement

The Federal Deposit Insurance Corporation’s draft covered bond policy statement proposes that covered bond issuance be limited to 4% of an issuer’s total liabilities, but raises the prospect of allowing greater issuance if higher insurance premiums are paid. It also plans to exempt covered bonds from the full 90 day stay on payments in the event of bankruptcy, but in a way that would not completely remove the possibility of delays.