Covered Bond Shock Forces Denmark to Devise Plan B for Banks
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Denmark is mapping out a new battle plan to protect $555 billion in mortgage bonds after Europe’s bank regulator proposed rules that threaten to trigger a sell-off of the securities.
As Denmark urges the European Commission to ignore a plan by the European Banking Authority that covered bonds be treated as second-class liquid assets, the mortgage industry is focusing on a clause that offers special treatment to nations with low government debt levels.