New parameters for liquidity and leverage proposed by the
Basel committee could threaten the Danish market in mortgage
credit bonds. But the instruments business model is very
safe and already tightly regulated.
Denmarks mortgage credit bonds are a unique product in
Europe. Similar to (and governed by the EU rules on) covered
bonds, they are issued by a specific pool of mortgage credit
institutions (MCIs). These are separate from conventional
banks, and provide loans only to homeowners by issuing bonds to
But new Basel definitions of...