Press release after the 37th meeting

21 June 2022

The current risk picture is characterised by opposite tendencies. On the one hand, there is high activity in the Danish economy and high labour market pressure. Together with accommodative financing terms, it provides a fertile ground for risk-building in the financial system. Corporate credit growth is hence increasing, and homeowners are increasingly opting for risky loan types. On the other hand, there are prospects of lower economic growth and higher interest rates, as a consequence of the war in Ukraine, persistent disruptions in supply chains and increasing inflation. The persistent disruptions in supply chains can result in structural changes to the economy.

Every quarter, the Council assesses the suitable countercyclical capital buffer level. The Minister for Industry, Business and Financial Affairs has followed the Council’s recommendation to raise the buffer rate to 2.5 per cent from 31 March 2023. The Council continues to consider this phasing-in appropriate. The Council is ready to recommend a reduction of the buffer rate with immediate effect if stress occurs in the financial system and there is a risk of severe tightening of credit granting to households and companies.

Read more here

Increase of countercyclical capital buffer

29 March 2022

The Systemic Risk Council (the Council) recommends to the Minister for Industry, Business and Financial Affairs that the countercyclical capital buffer be increased to a rate of 2.5 per cent from 31 March 2023. The Council assesses that risks are still building up in the financial sector, and that the buffer should therefore be increased. The war in Ukraine has resulted in increased uncertainty about the future development of the economy and financial conditions. The Council is ready to recommend a reduction of the buffer rate with immediate effect if stress occurs in the financial system and there is a risk of severe tightening of credit granting to households and companies.

Read more here

Activation of countercyclical capital buffer on the Faroe Islands

14 December 2021

The Systemic Risk Council recommends that the Minister for Industry, Business and Financial Affairs activates a countercyclical capital buffer at a rate of 1 per cent for Faroese exposures from 31 March 2023. The countercyclical capital buffer requirement will take effect 12 months after the Minister has announced an increase. The institutions thus have time to adjust. The Government is required, within a period of three months, either to comply with the recommendation or to present a statement explaining why the recommendation will not be complied with.

The minister of Industry, Business and Financial affairs has decided to activate the counter cyclical capital buffer on the Faroe Islands at 1 pct. for Faroese exposures for the 1st quarter of 2022. The activation is inforced as of 31th of March  2023.

Read more here