On five occasions between 1990 and 1994, SEB securitised mortgage loans totalling SEK 12 billion, and in June 2000, the same bank securitised mortgage loans worth approximately SEK 8.5 billion. SBAB securitised mortgages worth approximately SEK 1 billion in February 2000 and loans worth approximately SEK 8 billion in October 2000. Bokredit, owned by Den Danske Bank, has securitised a stock of mortgage loans to a 7  BIS Review 99/2000  value of SEK 1.3 billion. A new Internet-based issuer of mortgage loans is Europeloan, which started up operations in Sweden in February 1999. Europeloan is financing their internet based mortgage lending by securitisation of the loans abroad, up to now around SEK 0,5 billion. Objections that have been expressed against securitisation include the fact that up until now it has been relatively complicated and costly to set up special purpose vehicles, and it has not been possible to invest the bonds at such favourable interest rates as their rating would imply. Possible reasons are that the market is underdeveloped and the issues have been few, which has meant that liquidity in the bonds has been low. Securitisation of mortgages is common in the USA, where around half of the total outstanding loans stock of secured loans is securitised. In Europe, housing financing has mainly taken other forms. If competition in the mortgage market increases as a result of EMU, it is likely that the need to finance mortgage loans as economically as possible will also increase.
The yield on 10-year German government bonds continued to decline from mid-year under the influence of the ECB’s bond purchases. A moderate decline in yields was also observed in Switzerland. For example, the latest reading shows the yield on 10-year Confederation bonds just below the mid-year values, at around –0.6% (cf. chart 2). On the foreign exchange markets, the persistent downtrend of the US dollar has been the dominant theme in recent months. On a trade-weighted basis, the dollar has depreciated by over 7% since the end of June. Against the backdrop of predominantly positive risk sentiment, the dollar was less in demand as a safe-haven currency. The rise in inflation expectations in the US is also likely to have contributed to the depreciation of the dollar. The euro, by contrast, has appreciated by almost 3% on a trade-weighted basis since mid-year. It strengthened in particular following the announcement of the EU recovery fund, which market participants interpreted as a sign of stronger fiscal cohesion within the euro area. Trading in the pound sterling has been volatile over recent months in light of the ongoing Brexit negotiations; the currency has appreciated over 2% on a trade-weighted basis since mid-year. The Swiss franc trended mainly sideways on a trade-weighted basis during the summer months, before coming under renewed appreciation pressure in the autumn due to the second coronavirus wave and heightened uncertainty ahead of the US elections.