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Geithner Backs Covered Bonds

Timothy Geithner, the secretary of the Treasury, said he supports legislative efforts to create a covered-bond market as an alternative to existing government housing finance efforts, reports The New York Times.

Timothy Geithner, the secretary of the Treasury, said he supports legislative efforts to create a covered-bond market as an alternative to existing government housing finance efforts. Testifying before the Senate Banking Committee, Geithner acknowledged concerns that covered bonds could put the Federal Deposit Insurance Corp.’s bank deposit insurance fund at increased risk for losses as covered-bond investors would have seniority in default, but “that is something we can work through.”

Click here to read the story from The New York Times.

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