Half shielded by covered bonds

Great Joe, that's one idea, what about a massive sovereign wealth fund based on a proportion of the company tax received (Half shielded by covered bonds, October 14). No need to reduce the company tax rate as it's similar to that imposed by developed countries with welfare and advanced medical services. With the Norwegan wealth fund there are restrictions that limit the amount any government can draw down in the life of any parliament - so another government can't get ther hands on it. I think you should have a crack at caps on middle class welfare - manup and cap the amount of tax free income a superannuate can draw down. I think It's a disgrace that some people with millions in super are paying no tax - you could then raise the tax free allocation on income tax. There's your homework for the weekend - get cracking.

I think this is a truly horrific development (Half shielded by covered bonds, October 14). What is not made clear is that deposit holders in these banks are now exposed to losses when the 'assets' go bad.
The fact that this has bipartisan sponsorship is all the more scary.

On the contrary.
Covered bonds are a disaster, presaging a legal quagmire in a future banking crisis.
Covered bonds turn liabilities (depositors' funds) into an asset.
The baseness of this move merely reinforces the reality of the power of the Big 4 over Canberra.
A 'full root and branch review into the Australian financial system' is long overdue, but its main function would be to re-examine the failures induced by the Campbell and Wallis reviews.

It is of great concern to me that if the government guarantees individual deposits of up to $250,000 then in effect the government is the real guarantor of covered bonds (Half shielded by covered bonds, October 14).
I don't know what other assets banks have apart from all the mortgages they hold and thus does this mean that peoples' homes can be handed over to covered bond holders as well as depositors' money? Do our banks really need another source of funding? I thought they were awash with people's savings now.

Joe, I think this is a good summary of covered bonds (Half shielded by covered bonds, October 14). I have heard the term before but never understood what it means.