The Danish Financial Supervisory Authority has presented a proposal for a Supervisory Diamond for mortgage banks. It is a good initiative to introduce a Supervisory Diamond for mortgage banks as is already known from the existing Supervisory Diamond for banks.
The corners of the diamond are to be used in connection with supervision and are to serve as early indicators if a mortgage bank is beginning to assume too much risk. All corners of the diamond are relevant areas that could lead to increased risk. But irrespective of the diamond, the mortgage banks still bear the main responsibility for their risk management.