The Systemic Risk Council

The work of the Council seeks to prevent and reduce systemic financial risks that may put the economic development under stress.

  • Press release

    Press release after 42nd meeting

    3 October 2023

    Risk appetite in financial markets has increased based on expectations of a soft economic landing. The risk outlook is still characterised by high inflation and higher interest rates, which, together with the slowdown of economic growth in Denmark, are expected to weaken the resilience of some households and companies.

    The Council assesses that there are still unaddressed systemic risks related to the commercial real estate market. During the financial crisis loans to commercial real estate companies were one of the areas with the highest losses, and distressed banks had a relatively high concentration of properties. The currently higher interest rates contribute to higher costs in the commercial real estate sector, which increases the risk of losses on loans. The Council recommends that the Minister for Industry, Business and Financial Affairs activates a sector-specific systemic risk buffer for exposures to real estate companies at a rate of 7 per cent applicable from 30 June 2024. 

    Read more here   


  • Denmark

    Activation of a sector-specific systemic risk buffer for corporate exposures to real estate companies

    3 October 2023 

    The Systemic Risk Council recommends to the Minister for Industry, Business and Financial Affairs to activate a sector-specific systemic risk buffer for exposures to real estate companies at a rate of 7 per cent.

     Read more here





     
     

  • Denmark

    The growing prevalence of variable-rate mortgages with deferred amortisation contributes to the build-up of risk

    27 September 2022

    The Systemic Risk Council (the Council) observes that Danish homeowners are increasingly taking out variable-rate mortgages with deferred amortisation. These homeowners are taking on a risk of their loan payments rising significantly in the event of rising interest rates. This would result in substantially reduced disposable amounts and increased risk of loan default. The development contributes to build-up of risk and may add to losses in credit institutions from an economic downturn.

    The Council has published an observation, which is available here.




     
     

Press release

Press release after 42nd meeting

3 October 2023

Risk appetite in financial markets has increased based on expectations of a soft economic landing. The risk outlook is still characterised by high inflation and higher interest rates, which, together with the slowdown of economic growth in Denmark, are expected to weaken the resilience of some households and companies.

The Council assesses that there are still unaddressed systemic risks related to the commercial real estate market. During the financial crisis loans to commercial real estate companies were one of the areas with the highest losses, and distressed banks had a relatively high concentration of properties. The currently higher interest rates contribute to higher costs in the commercial real estate sector, which increases the risk of losses on loans. The Council recommends that the Minister for Industry, Business and Financial Affairs activates a sector-specific systemic risk buffer for exposures to real estate companies at a rate of 7 per cent applicable from 30 June 2024.

 

Recommendation

Activation of a sector-specific systemic risk buffer for corporate exposures to real estate companies

3 October 2023 

The Systemic Risk Council recommends to the Minister for Industry, Business and Financial Affairs to activate a sector-specific systemic risk buffer for exposures to real estate companies at a rate of 7 per cent.

The Systemic Risk Council on Twitter

Meetings in 2023 and 2024

Members of the Council

By law, the Council consists of the following members:

  • Two representatives from Danmarks Nationalbank, one being the chairman of the Board of Governors of Danmarks Nationalbank and chairing the Council.
  • Two representatives from the Danish Financial Supervisory Authority.
  • One representative from each of the following economic ministries: Ministry of Industry, Business and Financial Affairs, Ministry for Economic Affairs and the Interior and Ministry of Finance.
  • Three independent experts with knowledge of financial matters.
Picture of the members of the Council