WASHINGTON — How to ensure the Federal Deposit Insurance Corp. has the flexibility it seeks while giving investors and issuers the certainty they need emerged Wednesday as the central sticking point confronting lawmakers interested in developing a covered bond market in the U.S.
At a Senate Banking Committee hearing, supporters of the plan argued that covered bonds are an untapped channel that could supply additional liquidity to the sluggish mortgage markets. But their drive remained beset by doubts from the FDIC, which is concerned that covered bonds could potentially make bank failures more expensive.
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