A drop in confidence in Danish covered bonds was one of four downside risks highlighted by the International Monetary Fund (IMF) upon the conclusion of its latest report on the Danish economy last week, although the supranational body acknowledged progress being made by the authorities in tackling the area.

The International Monetary Fund has voiced its support for regulatory initiatives underway in Norway such as plans for higher risk weights for mortgages and closer scrutiny of covered bond issuance. Meanwhile, the Riksbank said Sweden’s banks need to be more resilient in the long run.