The Danish Financial Supervisory Authority (Danish FSA) conducted a study on the impact of COVID-19 on the Danish mortgage market, issued clarifications on requirements for internal ratings-based (IRB) models, and proposed guidelines on assessment of money laundering risks. Additionally, the Central Bank of Denmark (Danmarks Nationalbank) has published results of lending survey and set out recommendations on use of artificial intelligence by banks.
Below are the key highlights of the recent updates:
- Danish FSA has investigated the impact of COVID-19 pandemic on the Danish mortgage market and the analysis contains a review of conditions and mechanisms in the market, including the actions of key players, and sets out a number of experiences from this. The analysis notes that there is no evidence that the credit institutions capital or liquidity positions were challenged to such an extent that they became binding and thus limited the credit institutions' ability to be market makers.
- Danish FSA published clarification on requirements for risk-weight of exposures in Norway for institutions that use the internal ratings-based method for calculating credit risk. Danish FSA mentioned that the requirements should apply to all institutions that have exposures in Norway. For Danish internal ratings-based institutions that have exposures in Norway, the Danish FSA will, therefore, apply the same interpretations that will apply to the Norwegian banks.
- Danish FSA is consulting on a draft guideline on risk assessment of associations in connection with the implementation of customer due diligence procedures pursuant to the Money Laundering Act. The purpose of the guide is to provide companies with a tool that they use in their risk assessment of associations when they have to carry out customer due diligence procedures according to the money laundering rules. Comments are requested until April 20, 2022.
- The Central Bank of Denmark published lending survey results, which show, for first quarter of 2022, six large and medium-size banks, out of the 16 entities surveyed, report that they expect to tighten credit standards for private customers. Apart from the banks’ expectation of their overall credit standards, banks also report how they expect a number of factors to affect their credit standards in the following quarter. Almost half of the banks expect that changes in, among other things, perception of risk and appetite for risk will move credit standards in a tighter direction in the second quarter, which is related to the private customers’ increasing expenses.
- The Central Bank of Denmark's data expert recommend that financial companies should live up to ethical and regulatory standards as they increase their use of artificial intelligence. The recommendations include preparing and maintaining an overview or catalog of various artificial intelligence models that the organization uses, evaluating the models, setting aside resources to evaluate the models, and creating a forum with other participants from the financial sector to share experiences and best practices in the field.
- Study on Mortgage Market
- Internal Model Requirements
- Proposed Guidance on Money Laundering Risks
- Lending Survey Results
- Recommendations on Artificial Intelligence
Keywords: Europe, Denmark, Banking, Basel, Regulatory Capital, Covid-19, Credit Risk, IRB Model, Lending, Artificial Intelligence, Regtech, AML, ML Risk, IRB Approach, Central Bank of Denmark, Danish FSA
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.
The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.
The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).
The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.
The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.
The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)
The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.
The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.
The European Central Bank (ECB) published a paper that examines how credit rating agencies accepted by the Eurosystem, as part of the Eurosystem Credit Assessment Framework (ECAF)
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.