The reason is that Danish investors have only to a small extent invested in – and thus lost money on – subprime-related assets. We have our own good mortgage-credit products. However, in Denmark we have also seen how the uncertainty has made banks more reluctant to grant each other uncollateralised loans in the money market, particularly for longer maturities.
The result has been shorter maturities and higher financing costs. This mainly affects the banks that have built up considerable deposit deficits in recent years, based on the assumption that they would be able to raise inexpensive liquidity in the money market or by issuing bonds.