Consultation responses

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Consultation response concerning the bill to amend the Danish Financial Business Act, Anti-Money Laundering Act, Act on Alternative Investment Fund Managers, etc. and various other acts

Danmarks Nationalbank

A key lesson learned from the financial crisis is that it must be possible to address the problems of banks and mortgage banks without the use of government funds. The large, systemically important institutions perform functions that are critical to society and essential to financial stability. It must be possible to continue these functions if problems arise. This means that there must be sufficient funds contributed by owners and creditors, i.e. own funds and eligible liabilities.


Comments on the draft delegated act amending the commission delegated regulation on the Liquidity Coverage Ratio (LCR)

Danmarks Nationalbank

The European Commission has asked for comments on the proposed amendments to the short-term liquidity rules for EU banks known as Liquidity Coverage Ratio, LCR. Danmarks Nationalbank supports the amendments which solve the unwind problem for repos with central banks in a systemic crisis. Danmarks Nationalbank is still concerned about the framework for secured transactions, which can have some unintended consequences. Danmarks Nationalbank encourages the Commission to continue the work towards a general solution of the unwind problem for secured transactions.


Consultation response regarding the draft amendment to the executive order on good business practice for mortgage lending

Danmarks Nationalbank

The suggested amendment limits the product supply for homeowners with a total debt-to-income, DTI, of more than four and a loan-to-value, LTV, of more than 60 per cent. Danmarks Nationalbank finds it positive that the rules apply to all homeowners with high debt in proportion to income, regardless of the zip code of the property. On the other hand, Danmarks Nationalbank finds it inappropriate that highly indebted homeowners will still be able to finance housing purchases using deferred amortization loans. Restricting the possibility to obtain deferred amortization financing would reduce the vulnerability of homeowners to negative economic shocks such as declining house prices and unemployment, just like a higher monthly debt service would reduce the risk of short-sightedness due to low interest rates.


Reply to the Danish Financial Supervisory Authorithy's Discussion Paper on the Fit & Proper Regulations

Danmarks Nationalbank

Danmarks Nationalbank does not specifically address the individual aspects of the Fit & Proper regulations highlighted in the Danish Financial Supervisory Authority's discussion paper. On a more general basis, Danmarks Nationalbank finds it essential to maintain the owners' and management's full responsibility for the sound operation of a credit institution. The EU Fit & Proper regulations give the member states a certain degree of flexibility. In Danmarks Nationalbank's view, no Danish rules or practices generally expanding the Danish Financial Supervisory Authority's Fit & Proper tasks relative to the current regime should be implemented.