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.

Upcoming meetings

CANCELLED

The Minister releases the countercyclical capital buffer


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.

In recent years, the Council has focused on increasing credit institution's resilience through a gradual increase in the countercyclical capital buffer. The Council's recommendations to increase the buffer have been followed by the Minister for Industry, Business and Financial Affairs. The aim was to build up a buffer to a size substantial enough to make a difference in case the need to release it emerged. The release of the buffer in face of the uncertainty following the spread of covid-19 is therefore in line with the Council's approach. Releasing the buffer aims to prevent the banks and mortgage credit institutions from reducing credit supply due to capital shortfalls.

According to Danish legislation, the Systemic Risk Council is an advisory body, with the purpose of preventing and reducing systemic financial risks, that may put pressure on all or parts of the economy. The Council shall, according to Danish law, not act in relation to crisis management.

Read more (Danish Only)

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. This will take place with immediate effect.

Read the recommendation here. 
Read the minister's repsonse here. (Danish only)

Recommendation

Temporary reduction of capital requirements in the Faroe Islands

18 March 2020

The Systemic Risk Council, the Council, recommends to the Minister for Industry, Business and Financial Affairs that the general systemic risk buffer in the Faroe Islands be temporarily reduced to 2 per cent. The Council’s recommendation is in response to the uncertainty and challenges associated with the spread of covid-19.

Pressemeddelelse

Press release on changing the criteria for SIFI designation in the Faroe Islands

4 March 2020

The Systemic Risk Council, the Council, recommends to the government that a lower limit be introduced for when a bank in the Faroe Islands is designated as a systemically important financial institution. Systemically important financial institutions (SIFIs) are today designated on the basis of a number of indicators measuring the bank’s size in relation to the Faroese economy and banking sector.

Analysis

Analysis of requirements for Faroese banks

4 March 2020

The Danish Systemic Risk Council, in cooperation with Føroya Váðaráð, the Faroese Systemic Risk Council, has prepared an analysis of requirements for the Faroese banks.

The Systemic Risk Council on Twitter

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