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

December 18, 2014

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Denmark: Systemic Issues in Mortgage Loans and Covered Bond Finance: Technical Note, (USA: International Monetary Fund, 2014) accessed September 18, 2024

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.

Subject: Bonds, Commercial banks, Covered bonds, Financial institutions, Loans, Mortgages

Keywords: Bonds, Commercial banks, Covered bond bond market, Covered bond framework, Covered bond issuance, Covered bonds, CR, Credit risk, Finance system, Global, ISCR, Loan prepayment, Loans, Mortgage lending, Mortgage system, Mortgages, Prepayment risk, Rate loan, Variable rate mortgage

Publication Details

Pages:

27
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2014/349
Stock No:

1DNKEA2014007
ISBN:

9781498327572
ISSN:

1934-7685

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