Denmark Tells Banks to Ignore Basel on Mortgage Bonds
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Denmark’s financial regulator is telling banks to ignore global standards set by the Basel Committee on Banking Supervision and give mortgage bonds the top liquidity designation reserved for sovereign assets.
The Financial Supervisory Authority is disregarding Basel’s definition of easy-to-sell assets even as it requires banks to show they comply with liquidity coverage standards envisaged by the regulator. The Copenhagen-based watchdog will expand the pool of reporting banks “in the near future” from Denmark’s five largest lenders to include institutions with working capital that exceeds 12 billion kroner ($2 billion).