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Denmark wants its Basel exemption if it joins Europe's banking union 

May 26, 2015

Sabina Zawadzki, Reuters

Denmark want to keep a tacit exemption that allows its banks to count mortgage-backed bonds as highly liquid assets if it becomes the only country outside the euro zone to join the European Union's banking union.

The demand, made by Economy Minister Morten Ostergaard on Friday, may rankle with EU regulators who have wanted to iron out national differences in new banking rules agreed in the aftermath of the 2008 financial crisis.

"The Danish government considers it as an extremely important point that each Danish bank within the banking union can continue to cover up to 70 per cent of their buffer by highly secure Danish mortgage bonds," Ostergaard told Reuters.

"That is of utmost importance if Denmark is to participate in the euro group's banking union," he said.

The European Commission said last year it backed Denmark's position that its mortgage-backed bonds could be seen as highly liquid assets used in buffers against months-long shocks in financial markets.

Read more: Reuters

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