June 21, 2017 / 6:51 AM / a month ago

Denmark proposes funding social housing through government bonds

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COPENHAGEN, June 21 (Reuters) - The Danish government on Wednesday proposed paying for the construction and renovation of social housing beginning in 2018 through the issuance of government bonds rather than mortgages.

"Financing renovation and construction of social housing through government bonds instead of mortgages will result in cost reductions. In addition it will increase the transparency of the government's liabilities," transport, building and housing minister Ole Birk Olesen said in a stock exchange announcement.

Denmark's central bank said in a separate statement that it supported the proposal.

"With this proposal, the central government expects to achieve significant cost reductions. This reflects, among other things, that the interest rate on government bonds is lower than that on mortgages," central bank governor Lars Rohde said. (Reporting by Stine Jacobsen; editing by Jason Neely)

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