The Council discussed the further decline in tensions in the financial markets during the spring, which among other things was reflected in rising stock prices and increased risk appetite. In the past month, markets have shown some fluctuations due to increasing focus on the timing of central banks' withdrawal of liquidity. Internationally, there are som concerns regarding price developments in stock and credit markets in conjunction with the moderate prospects for growth globally. Possible challenges related to the Danish housholds' economic situation and the expiry of deferred amortization period for mortgage loans in the coming years, are considered to be manageable.
The Council decided to initiate analytical work with a view to consider whether the Danish households' high indebtedness can potentially involve systemic financial risks. The Council also initiated analytical work for the purpose of unveiling potential systemic risks associated with a prolonged period of low interest rates. The findings of the analyses will be discussed at the Council's coming meetings in 2013.
The European Systemic Risk Board (ESRB) has recommended the EU member states and their macro-prudential authorities to, among other things, define intermediate objectives for macroprudential policy and to ensure that a sufficient set of instruments to pursue the objectives are in place (ESRB recommendation, ESRB/2013/1 of 4 april 2013). The Council discussed how to include the ESRB recommendation in the future work of the Council. The Council also discussed the follow-up on a recommendation from the ESRB on the macro-prudential mandate of national authorities (ESRB recommendation, ESRB/2011/3 of 22 December 2011).
Finally, the Council discussed macro-prudential aspects of the forthcoming regulation of the Danish financial sector, including the implementation of the recommendations of the Committee on Systemically Important Financial Institutions (SIFIs) and the phasing-in of the new European capital requirements legislation (CRD IV and CRR). The Council adopted a recommendatoin on the phasing in of capital and liquidity requirements which is attached to this press release. The Council also discussed which institution that - on the basis of a recommendation from the Systemic Risk Council - should decide on the setting of i.a. the countercyclical capital buffer in CRR/CRD IV.
The Council is to meet at least four times a year. The next meetings of the Council are scheduled for September 25, 2013 and December 20, 2013.
Enquires can be directed to:
Julie Holm Simonsen, press coordinator
On telephone: (+45) 3363 6022