Increasing equity by one krone does not cost one krone

News - June 2018 - No. 3

Authors Danmarks Nationalbank
Subject Financial regulation; Financial stability; The Systemic Risk Council
Type News
Year 2018
Published 27 June 2018
The banks should have larger buffers so that they are more resilient in an economic crisis, which typically leads to losses on lending. That is why the banks have been met by stricter capital requirements since the financial crisis. From time to time it has been indicated that higher capital requirements will cost the banks an equivalent sum. That is not correct, Danmarks Nationalbank points out.