[Southack]

Covered bonds are the conservative way to fund home lending/buying because the "covered bonds" have to remain on the banks' accounting books.

In contrast, the very different "mortgage backed securities" are debt instruments that banks can hold off of their own accounting books...allowing them to become extraordinarily leveraged.

What you don't want is a Zimbabwe printing press at one extreme, or a Depression-era "lend no money" at the other extreme.

You want that happy middle ground. You can't just shut off the entire real-estate market (unless you want to live in the Middle-Ages). So new loans need to be made.

[dalereed]

” Depression-era “lend no money” at the other extreme”

That gets my vote.

No one should everget a home loan without putting at least 20% down and adjustable rate loan should be illegal.