Frontpage News 2016 The Danish financi...

The Danish financial sector meets with EU Commissioner Hill

17 May 2016

Today, the Association of Danish Mortgage Banks and the Danish Bankers Association met with EU Commissioner Jonathan Hill in Brussels to discuss the implications of the impending Basel regulations.

Chairman of the Danish Bankers Association, Tonny Thierry Andersen, and chairman of the Association of Danish Mortgage Banks, Michael Rasmussen are currently meeting with the EU’s Commissioner for Financial Stability, Financial Services and Capital Markets Union, Jonathan Hill. They will discuss, amongst other topics, the implications of the impending Basel regulations for Danish mortgages and for the rest of the financial sector.

As is well known, the Basel Committee on Banking Supervision (BCBS) is considering introducing a minimum requirement on how much capital mortgage institutions must keep for losses, no matter how secure the loan is, popularly called floor requirements. The scene is also set for a considerable tightening of the rules that will affect banks’ commercial lending and trade, for example on mortgage bonds.
Ultimately however, introducing the new Basel rules in Europe will remain a political task in an EU context, which is why Commissioner Hill plays a key role.
“The European Commission has previously shown an understanding for the challenges that our particular mortgage model has faced in relation to international regulations. Commissioner Hill has also already acknowledged that he is an ally to the Danish mortgage system. Therefore, it is essential that we equip the Commissioner with good arguments,” says Chairman of the Association of Danish Mortgage Banks, Michael Rasmussen.
The Chairman of the Danish Bankers Association, Tonny Thierry Andersen, also sees the meeting with the commissioner as a good opportunity for dialogue about the consequences of the impending regulation.
“In our view, the requirements for the sector have reached an appropriate level. If capital requirements for not only mortgages but also loans to large commercial companies are now to be further tightened, it could affect growth and jobs,” Tonny Thierry Andersen says.
Michael Rasmussen’s focus is naturally directed specifically towards mort-gage credit:
“The proposal we have seen from the BCBS so far will be a fundamental challenge for the Danish mortgage system. The proposal disregards the fact that Danish mortgages are very secure and have very low losses. If the proposal is implemented in European legislation it will mean that Danish mortgage institutions must be capitalised markedly more than today. The aim of the meeting today is, therefore, to give Commissioner Hill a greater insight into the challenges that the BCBS’s proposal entails for Danish mortgages. We would like to give the European Commission insight into the Danish concerns so that they can take them into consideration, when they later implement the BCBS’s recommendations,” Michael Rasmussen says.
The CEO of the Danish Bankers Association, Ulrik Nødgaard, and the CEO of the Association of Danish Mortgage Banks, Ane Arnth Jensen, also participated in the meeting and the topics are, of course, expected to concern the European Commission’s study of how existing legislation can be a barrier for growth and jobs, as well as the impending financial legislation from the European Commission, including in particular a revision of the EU’s capital requirement rules.
Further information:
Director of Communications, Nina Munch-Perrin, the Danish Bankers Association, tel.: +45 3016 1006.
Head of Communications, Carsten Brink, the Association of Danish Mortgage Banks, tel.: +45 3123 1654.
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