Pursuits
Banks Left Guessing If Mortgage Bonds Liquid Under Rules
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New regulation meant to ensure banks have enough easy-to-sell assets to survive a crisis is creating doubt over whether $1.1 trillion of mortgage debt qualifies, potentially hurting demand in a key cog of the U.S. home-finance system.
Left unclear was whether some or all of a type of bonds known as agency collateralized mortgage obligations can count toward the liquidity coverage ratio approved this week by U.S. banking regulators, according to analysts at JPMorgan Chase & Co., Credit Suisse Group AG and Citigroup Inc.