Rulemakers look at covered bonds

BRITAIN’S financial rulemakers have launched a review of the UK’s covered bond market regulation, to nurture the use of the securities by banks.

The Treasury and the Financial Services Authority are consulting the City on the market for the instruments, which are considered more resistant to financial jitters.

Tim Skeet, board member of the International Capital Markets Association, said: “[Covered bonds] are a vital source of long-term stable funding for the financial sector. They’re a well thought out product and are part of the solution, not the problem. We’re delighted to see the government give them time and resources.”