Danmarks Nationalbank regularly responds to consultations, for example when new bills are submitted for consultation. Consultation responses provide insight into Danmarks Nationalbank’s views on specific proposals within topics that fall within Danmarks Nationalbank’s purpose.

Comments on consultation: Reducing variation in credit risk-weighted assets - constraints on the use of internal model approaches

Today, Danmarks Nationalbank gives a consultation response to the Basel Committee's consultation on model parameter floors in the banks' internal risk models for determining capital requirements. Danmarks Nationalbank propose that the introduction of model parameter floors are reconsidered by the Committee or that they are calibrated in a granular way to allow for low levels when duly justified by for example liability rules and the efficiency of the legal system. Risk weighted exposures should be determined by the actual risk whereas the aggregate level of capital is to be regulated by the capital requirements. Danmarks Nationalbank's concern is not the overall level of capital but the incentive to increase risk caused by the introduction of parameter floors.