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Soros Venture Urges Denmark to Ignore EBA Covered Bond Plan

Denmark should ignore the European Banking Authority and continue allowing its banks to use covered bonds as highly liquid assets, according to a venture backed by billionaire investor George Soros.

Denmark’s $530 billion mortgage-backed covered bond industry has been in crisis talks since it emerged last week that the London-based EBA will probably urge the European Commission not to give the securities the top liquidity stamp, an outcome Denmark has been lobbying to prevent since late 2010. Business Minister Henrik Sass Larsen said Dec. 2 Denmark will prevail in its efforts to persuade Europe not to interfere in its two-century-old mortgage system.