Comments on: Replacing Frannie with a new bond guarantee http://blogs.reuters.com/felix-salmon/2010/08/24/replacing-frannie-with-a-new-bond-guarantee/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: McGriffen http://blogs.reuters.com/felix-salmon/2010/08/24/replacing-frannie-with-a-new-bond-guarantee/comment-page-1/#comment-17615 Tue, 24 Aug 2010 23:11:45 +0000 http://blogs.reuters.com/felix-salmon/?p=5061#comment-17615 Did the bandwagon for “Covered Bonds” just never get going? I seem to recall a few sessions scheduled at an ASF conference (in those halcyon times, at Vegas) on that topic; to me, the funding & accounting for the issuance of these just would not seem to mesh well for a large bank like JPM or Wells Fargo.

Asset-backed securities can function well enough for shorter-dated receivables like Cards or Autos, since money-funds can buy up all those 1yr Fixed / Floater pieces.

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By: dWj http://blogs.reuters.com/felix-salmon/2010/08/24/replacing-frannie-with-a-new-bond-guarantee/comment-page-1/#comment-17602 Tue, 24 Aug 2010 18:41:10 +0000 http://blogs.reuters.com/felix-salmon/?p=5061#comment-17602 With securities, and even to some extent with deposits, it kind of seems to me that if we want a government guarantee on these sorts of things, we should just let the government buy what it would be guaranteeing and let whomever would be buying the guaranteed whatsit buy government bonds instead. If say Morgan Stanley were guaranteeing something, I could see one making a liquidity distinction — MS doesn’t want to have to tie up capital like that — but the US government has a lower cost of capital than any of the ultimate buyers or sellers anyway, so I don’t think that really applies.

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