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

Press release after the 41st meeting

13 June 2023

The risk outlook has been characterised by turmoil related to problems in specific banks in the United States and Europe. The turmoil lead among other things to rising funding costs for Danish and foreign financial institutions and very few new issuances of debt instruments in the markets. The episodes underline the importance of sound risk management and a robust maturity profile for the institutions’ issuances to financial stability.

The risk outlook is also characterised by higher interest rates and high inflation which is expected to weaken the resilience of some homeowners and companies. Risks are especially pronounced in the commercial real estate market and for highly indebted homeowners with interest-only loans. The Council will uncover risks related to the real estate market and consider policy actions to address these risks.

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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.

The Council has updated its method for assessing the countercyclical capital buffer rate

13 June 2023

The Systemic Risk Council has updated its method for assessing the countercyclical capital buffer following its meeting on the 12th of June 2023. The purpose of the update is to reflect the existing practice for releasing the countercyclical capital buffer more clearly. 

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