The Canadian government has officially announced its intention to introduce legislation governing covered bonds, “making it easier for Canadian financial institutions to access this low-cost source of funding.”
The announcement came in Ottawa as part of the latest Budget, tabled in Canada’s House of Commons by Finance Minister James M. Flaherty (March 4). The relevant portion reads:
“One of the lessons of the global financial crisis is that financial institutions need to have access to a variety of funding sources. The Government will help federally regulated financial institutions diversify their funding sources by introducing legislation setting out a framework for covered bonds. Covered bonds are debt instruments that are secured by high quality assets, such as residential mortgages. The legislation will increase legal certainty for investors in these debt instruments, thereby making it easier for Canadian financial institutions to access this low-cost source of funding.” READ MORE>>
http://www.coveredbondinvestor.com/news/canada-moves-toward-covered-bond-legislation