Just tell them no

The New Zealand subsidiaries of Australian banks are apparently about to raise money in a way that they are prohibited from doing here at home. The s0-called “covered bonds” are backed by assets such as mortgages that stay on the lender’s balance sheet and that can be sold in a default. Bloomberg reportsthat the Australian Prudential Regulation Authority, or APRA, bans covered notes because they are not “consistent with depositor preference provisions set out in the Banking Act,” according to its website.

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