The banks can therefore use covered bonds for long-term funding without this becoming prohibitively expensive. The banks can use covered bonds as a tool for better matching maturities on the asset and the liability side and thus reduce their liquidity risk. Covered bonds are therefore a funding tool, which can for example help banks comply with future liquidity regulation.
Against this background, Danmarks Nationalbank does not support the idea of abolishing this possibility. On behalf of Danmarks Nationalbank, I hereby thank the Danish Mortgage Banks’ Federation for our successful cooperation during the past year. BIS Review 37/2010  3  Thank you for your attention. 4  BIS Review 37/2010