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.

 

Meeting of the Systemic Risk Council

14 December 2020
The risk outlook continues to be influenced by covid-19 and the measures introduced to curb the spread of infection in Denmark and abroad. In light of current developments, the Council recommends that the rate of the countercyclical capital buffer should remain unchanged at 0 per cent. The Council does not expect to recommend an increase of the buffer rate until the middle of 2021 at the earliest.

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)