Featured Product

    Danish FSA Sets Out Results of Stress Tests on Danish Banks

    July 30, 2021

    The Danish Financial Supervisory Authority (FSA) published the results for the Danish participants of the EU-wide stress test 2021. Danske Bank, Nykredit, Jyske Bank, and Sydbank are the four Danish banks that participated in the stress test. The results showed that the capital situation in the Danish institutions is significantly affected by the severe economic downturn in the adverse scenario. Danish FSA also published the individual stress test results for these banks.

    Danish FSA notes that this is a very severe stress test, which leads to significant decreases in the capital ratios of the institutions. For Danske Bank, the decrease is of such a magnitude that the institution has to make use of the capital conservation buffer over the three-year projection. Jyske Bank fulfils its capital requirements, though with modest excess capital. The results show that the capitalization of some of the largest Danish institutions does come under pressure in the EU-wide stress test. However, all Danish institutions retain capital that is comfortably above their solvency need. The results reflect a very severe adverse scenario, which is assumed to build on an already stressed macroeconomic starting point as a result of the COVID-19 crisis. The results underline the need for institutions to maintain a robust capitalization going forward. The results of the EU-wide stress test will be included in the Danish FSA considerations regarding the setting of the Pillar 2 Guidance, or P2G, for the participating Danish institutions. The Pillar 2 Guidance can be interpreted as a prudential add-on to the solvency need. The ongoing dialog of Danish FSA with the institutions, on capital targets and distribution policy, will continue to be based on stress tests based on scenarios and assumptions laid down by the Danish FSA.


    Related Links

    Keywords: Europe, Denmark, Banking, Stress Testing, COVID-19, Regulatory Capital, Pillar 2, Pillar 2 Guidance, SREP, Danish FSA

    Featured Experts
    Related Articles

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News

    FASB Proposes Improvements to 2023 GAAP Reporting Taxonomy

    The Financial Accounting Standards Board (FASB) is seeking comments, until November 03, 2022, on the proposed technical and other conforming improvements for the 2023 GAAP Financial Reporting Taxonomy.

    November 03, 2022 WebPage Regulatory News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8588