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To: Hawkmoon who wrote (113261)	7/24/2010 11:06:01 AM
From: Haim R. Branisteanu	Respond to of 116555

If a covered bond is on the books of a financial institution the equity of same institution is subordinated to the covered bond. In a US MBS or ABS there is no equity subordinated to the debentures except the underlying assets/cashflow etc., and with easier BK laws the creditworthiness of a MBS or ABS is lower of all other terms are identical, meaning it would be easier to collect on the collateral in Europe than in the US if things go wrong The main claim against the US WS firms are not the MBS or ABS type of debenture but the synthetic products that where build on top of those securities mixed with lower grade debentures (subprime) and leveraged further and sold as AA or AAA financial instruments etc.