Denmark : Systemic Issues in Mortgage Loans and Covered Bond Finance: Technical Note

Author/Editor:

International Monetary Fund. Monetary and Capital Markets Department

Publication Date:

December 18, 2014

Electronic Access:

Free Full Text (PDF file size is 579 KB).Use the free Adobe Acrobat Reader to view this PDF file

Summary:

This technical note analyzes systemic issues in mortgage loans and covered bond finance in Denmark. Mortgage lending has seen significant product innovation in recent years. Loans with adjustable interest rates and/or interest-only periods, which have been introduced since the late 1990s, had grown to 75 percent and 53 percent, respectively, of total outstanding mortgage loans at the end of 2013. The major changes in the characteristics of the underlying mortgage loans have naturally been reflected in an important evolution of the covered bond market. Traditionally, covered bonds were callable annuities with maturities closely matching those of the underlying fixed rate loans. In contrast, adjustable and variable interest rate loans are financed by bonds with short maturities.

Series:

Country Report No. 14/349

Subject:

English

Publication Date:

December 18, 2014

ISBN/ISSN:

9781498327572/1934-7685

Stock No:

1DNKEA2014007

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

27

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