In recent years, the credit rating agencies’ changing views of the Danish mortgage credit system have attracted much attention – by the mortgage banks and by the press. While there is general agreement that Danish mortgage credit starts with an “A”, the question is how many “A”s a given business model and portfolio composition should have.
Today, I would like to make it clear that the purpose of regulating mortgage credit is not to ensure that all mortgage bonds are always “triple A” rated. Regulation sets limits, within which the mort- gage banks must operate. Where the mortgage banks choose to position their business models and risk profiles within these limits is up to the individual mortgage bank.