Danish financial regulation, including Danish legislation implementing EU directives, is implemented in the Faroe Islands via decrees that may take into account special Faroese circumstances.
The decree whereby the rules on the Systemic Risk Council enter into force in the Faroe Islands took effect on 1 February 2015. The decrees concerning determination of the countercyclical capital buffer took effect on 1 July 2015 for the Faroe Islands.
The countercyclical capital buffer is a requirement to banks' buffers that varies with the developments of systemic financial risks. The Council regularly assesses the countercyclical capital buffer rate in the Faroe Islands, and publishes after each meeting the key indicators on which the assessment of the countercyclical capital buffer rate relies. The Council's assessment relies on further information in addition to the key indicators such as other indicators and policies.
Current countercyclical capital buffer rate in the Faroe Islands
0 per cent
Each quarter the Minister for Industry, Business and Financial Affairs sets the countercyclical capital buffer rate for the Faroe Islands, Denmark and Greenland.