"Because covered bonds remain on an institution’s balance sheet, the institution must hold more capital than in a typical securitization. Thus, capital requirements could constrain the growth of the covered-bond market. New accounting rules, upcoming changes in capital rules that may require higher levels of capital for assets held on a bank’s balance sheet, and the "skin-in-the-game" securitization provisions in the recent Dodd-Frank Wall Street Reform and Consumer Protection Act, which require forms of risk retention for securitizers of loans, are among the factors that may have an impact going forward on the relative advantages and disadvantages of covered bonds and securitization for financial institutions."

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