Requires the covered bond regulator from time to time to establish minimum over-collateralization requirements for covered bonds backed by each eligible asset classes (including residential mortgage, commercial mortgage, public sector, small business, and other asset classes) based on the credit, collection, and interest-rate risks (excluding liquidity risks) associated with such eligible asset class.

Requires the eligible assets and substitute assets in each cover pool that secures covered bonds to meet, in the aggregate and at all times, the applicable minimum over-collateralization requirements.

Requires each issuer of covered bonds to: (1) report monthly on whether the cover pool that secures the covered bonds meets the applicable minimum over-collateralization requirements; and (2) appoint an unaffiliated entity as independent asset monitor for the applicable cover pool.

Requires the independent asset monitor to verify and disclose to the issuer's primary financial regulatory agency, the covered bond regulator, and the applicable covered bond holders whether the cover pool that secures the covered bonds meets the statutory minimum over-collateralization requirements.

Prescribes: (1) covered bond eligibility requirements; and (2) procedures governing default and insolvency of a covered bond both prior and subsequent to conservatorship, receivership, liquidation, or bankruptcy of the issuer.

Prescribes procedures governing default or insolvency of a covered bond both prior and subsequent to conservatorship or receivership by the Federal Deposit Insurance Corporation (FDIC), liquidation, or bankruptcy of the issuer, including trusteeship of the estate in bankruptcy by the covered bond regulator or an appointee.

States that any covered bond issued or guaranteed by a bank is a security issued or guaranteed under specified securities laws.

Amends the Secondary Mortgage Market Enhancement Act of 1984 to include covered bonds within its purview.