Meeting of the Systemic Risk Council

23 March 2021
The current outlook with very loose financial conditions, increasing asset prices and prospects for a rapid recovery provides ground for risk build-up. The Council expects to recommend an increase in the countercyclical capital buffer in the middle of 2021, unless risk build-up slows down considerably or there is a new negative shock to the economy. There are also signs of risk build-up in the residential real estate market, especially in Copenhagen. The Council finds the current development increasingly concerning and expects to recommend new initiatives to the government to curb risk build-up at its next meeting.

The Systemic Risk Council encourages Danish institutions to restrict pay-outs

18 December 2020

On 18 December 2020, the European Systemic Risk Board (ESRB) issued a new recommendation to relevant national authorities to request financial institutions to refrain from dividend distributions, share buy-backs and variable remuneration. The recommendation applies until 30 September 2021, and amends the previous recommendation expiring at the end of 2020. The Systemic Risk Council endorses the ESRB recommendation and encour-ages Danish institutions to restrict pay-outs that erode their own funds.

 

The minister releases the countercyclical capital buffer

12 March 2020
As a reaction to covid-19, the Minister for Industry, Business and Financial Affairs decided on 12 March 2020 to reduce the countercyclical capital buffer rate to 0 per cent with immediate effect.

Read more here (Danish only)

 

Recommendation: Temporary reduction of capital requirements in the Faroe Islands

18 March 2020
As a reaction to the uncertainty and the challenges posed by the current covid-19 outbreak, the Council recommends the Minister for Industry, Business and Financial Affairs to temporarily reduce the systemic risk buffer in the Faroe Islands to 2 per cent. The government has followed the Council's recommendation to suspend the latest increase of the systemic risk buffer in the Faroe Islands from 2 per cent to 3 per cent, which entered into force on 1 January 2020.

Read the minister's response here. (Danish only)