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Basel Seen Defying Logic in Denmark as Rule Hits Mortgages

Denmark is warning that the world’s biggest mortgage market per capita is again under threat from a proposal by the Basel Committee on Banking Supervision.

A plan to limit single counterparty exposures to 25 percent of a lender’s tier 1 capital isn’t feasible in a market dominated by four mortgage banks, according to the Danish Financial Supervisory Authority and industry groups. Complying with the requirement would introduce currency risks and erode the very liquidity that Basel has told banks to build, they say.