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 2022

28. marts 2022
20. juni 2022
26. september 2022
19. december 2022
  • Denmark

    Press release after 38th meeting

    27 September 2022

    Risks continue to build up in parts of the financial system. Corporate credit growth has risen sharply, and prevalence of risky loan types are increasing among households. The Council observes that the growing prevalence of variable-rate loans with deferred amortisation is contributing to the build-up of risk. Growth is set to decline due to rising inflation and interest rates but the capacity pressure in the Danish economy is high with a tight labour market, among other things. At the same time increased volatility in the financial markets has created a need for credit institutions to increase their focus on liquidity management.

    Read more here

     

  • Denmark

    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.



  • Denmark

    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

     

  • 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.

    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

Press release

Press release after 38th meeting

27 September 2022

Risks continue to build up in parts of the financial system. Corporate credit growth has risen sharply, and prevalence of risky loan types are increasing among households. The Council observes that the growing prevalence of variable-rate loans with deferred amortisation is contributing to the build-up of risk. Growth is set to decline due to rising inflation and interest rates but the capacity pressure in the Danish economy is high with a tight labour market, among other things. At the same time increased volatility in the financial markets has created a need for credit institutions to increase their focus on liquidity management.

Read more here

Observation

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 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