The lack of European-style covered bond programmes in the US market has been a source of complaints since the late 19th century, but it has taken the financial crisis of the past two years to put them back on the political agenda.

The US mortgage market has traditionally been financed by banks using deposits to fund loans or through securitisations. However, the financial crisis highlighted the dangers of banks using short-term funding when liquidity dries up. In addition, the bailout of government-sponsored agencies Fannie Mae and Freddie Mac, which largely provided financing for residential mortgages, has given further impetus to reform financing through more involvement from the private sector.