It increases competition between Danish financial institutions, and gives them access to operate on the same terms and conditions as foreign credit institutions. It should also be born in mind that the amendment will not entail radical changes in Danish home financing overnight. Many adjustments have already taken place in the last couple of years.
Here, I have in mind the "mortgage loans" launched by the banks with great success. Seen in this perspective, covered bonds issued by banks can promote financial stability as a stable source of financing mortgage loans, thereby covering the large deposit deficit in a more satisfactory manner. When the covered bond legislation is amended, Danmarks Nationalbank prefers a simple, robust model.