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.

Meetings in 2021 & 2022

  • Denmark

    Press release after the 35th meeting

    14 December 2021
    The current situation of very loose financial conditions, increasing asset prices and a high level of economic activity provides ground for risk build-up. Therefore, the Council recommends to the Minister for Industry, Business and Financial Affairs to increase the countercyclical capital buffer to 2.0 per cent from 31 December 2022. After a relatively mild downturn, economic activity is also booming on the Faroe Islands. Therefore, the Council recommends to the Minister for Industry, Business and Financial Affairs to activate the countercyclical capital buffer at 1.0 per cent on the Faroese Islands from 31 March 2023.

    Read more here

     

  • Denmark

    Increase of countercyclical capital buffer

    14 December 2021
    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 2.0 per cent from 31 December 2022. The Council assesses that risks are still building up in the financial sector, and that the buffer should therefore be increased. At its meeting in March 2022, the Council expects to recommend a further increase of the buffer to 2.5 per cent, unless the Council sees signs of a slowdown in risk build-up. The Council's intention is that the buffer is to be built up gradually, but quickly, to 2.5 per cent, so that capital is built up which can be released if stress arises in the financial system. Phased buffer increases are in line with the Council's strategy of gradually increasing the buffer rate to a level of 2.5 per cent.

    15 December 2021, the Minister for Industry, Business and Financial Affairs has decided to increase the countercyclical capital buffer in line with the recommendation.

    Read more here

  • Faroe Islands

    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.

    Read more here


     

  • Denmark

    Follow-up on recommendation from the Systemic Risk Council

    28 september 2021
    In June 2021, the Systemic Risk Council, the Council, issued a recommendation to the Danish Government to restrict Danish homeowners' access to interest only mortgage loans. The Council recommended that interest only mortgage loans are only granted to borrowers with a loan-to-value ratio below 60 per cent of the value of the home.
    The Government is required, within three months, to either comply with the recommendation or explain why the recommendation has not been complied with. If the Council considers that the actions taken do not sufficiently follow the Council's recommendation, the Council must publish its evaluation of the consequences for systemic risks.

    Read more here

     

Press release

Press release after the 35th meeting

14 December 2021

The current situation of very loose financial conditions, increasing asset prices and a high level of economic activity provides ground for risk build-up. Therefore, the Council recommends to the Minister for Industry, Business and Financial Affairs to increase the countercyclical capital buffer to 2.0 per cent from 31 December 2022. 

After a relatively mild downturn, economic activity is also booming on the Faroe Islands. Therefore, the Council recommends to the Minister for Industry, Business and Financial Affairs to activate the countercyclical capital buffer at 1.0 per cent on the Faroese Islands from 31 March 2023.

Read the press release here

Recommendations

Increase of countercyclical capital buffer

14 December 2021

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 2.0 per cent from 31 December 2022. The Council assesses that risks are still building up in the financial sector, and that the buffer should therefore be increased.

At its meeting in March 2022, the Council expects to recommend a further increase of the buffer to 2.5 per cent, unless the Council sees signs of a slowdown in risk build-up. The Council's intention is that the buffer is to be built up gradually, but quickly, to 2.5 per cent, so that capital is built up which can be released if stress arises in the financial system. Phased buffer increases are in line with the Council's strategy of gradually increasing the buffer rate to a level of 2.5 per cent.

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.

Read more here 

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