General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
June 20, 2017

IMF published its staff report and selected issues report in the context of the 2017 Article IV consultation with Denmark. The IMF Directors commended the authorities for good progress on upgrading the financial regulatory framework. As per the staff report, the authorities have taken major strides implementing EU regulations, including those related to Capital Requirements Directive and Regulation (CRD IV/CRR), Solvency II, and the Bank Recovery and Resolution Directive or BRRD.

The staff report also highlighted that, in 2016, Danish Financial Supervisory Authority (DFSA) introduced liquidity coverage ratio (LCR) requirements for systemic and non-systemic banks. All systemic banks have capital buffers in excess of regulatory minima, with the system-wide regulatory tier 1 capital ratio currently at about 21%. Short-term liquidity requirements are met comfortably, with all systemic credit institutions exceeding the current minimum LCR. A current issue under the CRR is the application of the net stable funding ratio (NSFR), where the treatment of short-term mortgage bonds as stable funding remains to be resolved before implementation in 2018. Under the BRRD, a remaining item is the introduction of the minimum requirement for own funds and eligible liabilities (MREL). DFSA has set out preliminary principles, which suggest that MREL for systemically important financial institutions will be set at two-times the total capital requirements—to be met with convertible instruments (that can be bailed-in). Individual bank requirements are expected by year-end. Meanwhile, insurance firms and pension funds have been adjusting their product designs to cope with the low interest rate environment, particularly by shifting away from guaranteed-return products to market-based products. Insurance stress tests show that Danish insurance firms would be less affected in stress scenarios than their peers abroad, including because their interest-rate sensitivity is reduced by using derivatives.

 

The selected issues report examines the household balance sheet structure in Denmark and sensitivity to rising rates. Another area addressed by this report is the migration integration in Denmark and Europe. The report also investigates the dynamics of firm investment in Denmark, using an augmented version of the traditional accelerator model of investment.

 

Related Links

Staff Report (PDF)

Selected Issues Report (PDF)

Keywords: IMF, Denmark, Article IV, Europe, Banking, Insurance, LCR, CRD IV

Related Articles
News

HKMA Decides to Maintain Countercyclical Capital Buffer at 2.5%

HKMA announced that, in accordance with the Banking (Capital) Rules, the countercyclical capital buffer (CCyB) ratio for Hong Kong remains at 2.5%.

April 16, 2019 WebPage Regulatory News
News

EP Approves Agreement on Package of CRD 5, CRR 2, BRRD 2, and SRMR 2

The European Parliament (EP) approved the final agreement on a package of reforms proposed by EC to strengthen the resilience and resolvability of European banks.

April 16, 2019 WebPage Regulatory News
News

FDIC Consults on Approach to Resolution Planning for IDIs

FDIC approved an Advance Notice of Proposed Rulemaking (ANPR) and is seeking comment on ways to tailor and improve its rule requiring certain insured depository institutions (IDIs) to submit resolution plans.

April 16, 2019 WebPage Regulatory News
News

EP Resolution on Proposal for Sovereign Bond Backed Securities

The European Parliament (EP) published adopted text on the proposal for a regulation of the European Parliament and of the Council on sovereign bond-backed securities (SBBS).

April 16, 2019 WebPage Regulatory News
News

PRA Seeks Input and Issues Specifications for Insurance Stress Tests

PRA announced that it will conduct an insurance stress test for the largest regulated life and general insurers from July to September 2019.

April 15, 2019 WebPage Regulatory News
News

PRA Finalizes Policy on Approach to Managing Climate Change Risks

PRA published the policy statement PS11/19, which contains final supervisory statement (SS3/19) on enhancing banks’ and insurers’ approaches to managing the financial risks from climate change (Appendix).

April 15, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: First Update for April 2019

EBA published answers to nine questions under the Single Rulebook question and answer (Q&A) updates for this week.

April 12, 2019 WebPage Regulatory News
News

EIOPA Statement on Application of Proportionality in SCR Supervision

EIOPA published a supervisory statement on the application of proportionality principle in the supervision of the Solvency Capital Requirement (SCR) calculated in accordance with the standard formula.

April 11, 2019 WebPage Regulatory News
News

FED Updates Form and Supplemental Instructions for FR Y-9C Reporting

FED updated the form and supplemental instructions for FR Y-9C reporting. FR Y-9C is used to collect data from domestic bank holding companies, savings and loan holding companies, U.S intermediate holding companies, and securities holding companies with total consolidated assets of USD 3 billion or more.

April 11, 2019 WebPage Regulatory News
News

OSFI Finalizes Guidelines on Liquidity Adequacy and NSFR Disclosures

OSFI published the final Liquidity Adequacy Requirements (LAR) guideline and the net stable funding ratio (NSFR) disclosure requirements guideline.

April 11, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2920