EBA spots Scandi liquidity strain

By Bill Thornhill
03 Apr 2014

The European Banking Authority (EBA) has acknowledged that Danish and Norwegian banks do not have enough local currency assets to meet their liquidity requirements (LCR), but stopped short of recommending covered bonds to fill the gap.

The Danish covered bond industry has argued for years that the tiny government bond market means Danish covered bonds should have equivalent liquidity status to government bonds elsewhere, but the EBA does not recommend this solution in its liquidity study.

The EBA has been the main opponent of upgrading ...

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