In a statement, Moody’s Investor Service's said that the proposed legislation for a U.S. covered bond law does not address the liquidation risk that exists in the current U.S. covered bond programs or contain any alternatives.

The existing draft for a U.S. covered bond law is called the Equal Treatment of Covered Bonds Act of 2009, which is intended to place covered bonds on an equal footing with other qualified papers under the Federal Deposit Insurance Corp. (FDIC). The proposal has now reached the U.S. House of Representatives.

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