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Letter to The Basel Committee on Banking Supervision

Danmarks Nationalbank and Finanstilsynet strongly support the aim of the Basel Committee's capital and liquidity reform package. We are however deeply concerned with the treatment of Danish covered bonds in the definition of liquid assets in the Liquidity Coverage Ratio. It is our assessment that the proposal of the 26th of July 2010 is more likely to increase the risk of instability in the Danish financial system and thus run counter to the overall aim of the reform package.