Are covered bonds a substitute for mortgage-backed securities?

Santiago Carbó-Valverde (scarbo@ugr.es), Francisco Rodríguez-Fernández and Richard Rosen
Authors registered in the RePEc Author Service: Santiago Carbo Valverde and Francisco Rodríguez Fernández (franrod@ugr.es)

No WP-2011-14, Working Paper Series from Federal Reserve Bank of Chicago

Abstract: Covered bonds and mortgage-backed securities both allow mortgages to be financed with duration-matched bonds. Given the problems in the MBS market during the financial crisis, some suggest that covered bonds might be a substitute for MBS. We examine the use of covered bonds and MBS in the U.S. and Europe, finding that the two are used for different purposes. Covered bonds are used more to increase liquidity than are MBS. MBS are more often used in ways consistent with exploiting some kinds of agency problems.

Keywords: Bonds; Mortgage-backed securities (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-ure
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Citations: View citations in EconPapers (3)

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Journal Article: Are covered bonds a substitute for mortgage-backed securities? (2017)
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