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Dutch Mortgage-Bond Market Threatened by Capital Rules, DSA Says

New bank capital rules risk undermining demand in the 262 billion-euro ($342 billion) market for Dutch residential mortgage-backed securities, according to an industry body.

Banks and insurers, the biggest sellers and buyers of RMBS, will have to match capital reserves with the perceived riskiness of the assets they own, under regulations from the European Commission. That will deter them from buying RMBS because most lack the right tools to calculate risk weighting, according to the Dutch Securitisation Association.