Facts about Danish mortgage  

In Denmark, the mortgage bond market is more than four times larger than the Danish government bond market - and mortgage bank lending exceeds commercial bank lending. Moreover, Denmark has the largest issuance of covered bonds against mortgages on real property in Europe. This sets Denmark apart from what is usual in other parts of the Western World. 
 

The Danish mortgage bond market is one of the largest in the world, both in absolute terms and relative to the size of the economy. The market value of all Danish outstanding mortgage bonds (traditional mortgage bonds, covered bonds and covered mortgage bonds) exceeds DKK 2,300bn (app. EUR 310bn). The Danish mortgage bond market is actually more than four times larger than the Danish government bond market. The market value also exceeds total Danish GDP.
 

In Europe, only the German mortgage bond market surpasses the Danish. Due to its size alone, the mortgage bond market plays an important role in the Danish financial markets.

 

The Danish mortgage bond market is more than four times larger than the Danish government bond market.

Fig.1. The market value of Danish government and mortgage bonds, August 2009.

 

Source: Danmarks Nationalbank

 

Mortgage bank lending exceed commercial bank lending.
Fig.2. Retail and commercial lending by commercial banks and mortgage banks, August 2009.

 

Source: Danmarks Nationalbank 


Denmark has one of the largest covered bond market in Europe

Table 1: Outstanding of Covered Bonds in various European countries, 2008.

  Outstanding, EURbn Share in percentage
Germany 806 34
Spain 332 14
Denmark 325 14
France 264 11
The UK 187 8
Sweden 126 5
Europe, total 2337  
6 largest CB markets' share of Europe, total   87

Source: ECBC, 2008


Fig.3: Outstanding covered bonds as share of GDP, 2008

Source: ECBC, 2008

 

Although Denmark is only the fourteenth largest economy in Europe, it contains one of the largest mortgage bond markets.

 

Denmark has the largest outstanding of issued covered bonds – when measure to the size of our economy (139 per cent of GDP)
 

Denmark has one of the biggest issuance - measured in volume - of covered bonds against mortgages on real property in Europe, says calculations from the European Covered Bond Council (ECBC), whose latest calculations cover 2008.

 

Germany and Spain are number 1 and 2 on the list of the largest covered bond markets in Europe. On a third ranking comes Denmark where covered bond issues totaled EUR 325bn – corresponding to 14 pc of the aggregate issues of "mortgage backed covered bonds" in Europe.

 

Number four and five are France (11 pc) and the UK (8 pc). Sweden is the sixth largest covered bond market in Europe (5 pc). Between them, the six countries cover close to 90 pc of the total European market.

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