Bankers and securities industry representatives are pushing the Federal Deposit Insurance Corp. (FDIC) to go further in encouraging covered bonds as an alternative to securitization.

Many institutions praise the agency's interim policy statement removing one obstacle to covered bonds, but several banks argue that the policy statement was too narrow in scope, would put U.S. banks at a disadvantage against foreign counterparts, and did not define what bondholders would be paid in the case of a bank failure.

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