Analysis focuses on current issues of particular relevance to Danmarks Nationalbank’s objectives. The analyses may also contain Danmarks Nationalbank’s recommendations. They include our outlook for the Danish economy and our assessment of financial stability. The series is targeted at people with a broad interest in economic and financial matters.
Interest rate hikes affect the banks and their customers
Higher interest rates and consumer prices are draining the resilience of household customers, with spillover effects on businesses. At the same time, banks are generating increased net interest income because of the development in interest rates. Increased earnings may counter the effect from higher impairment charges, which may be the result of the higher interest rates in the long term. In March, problems in specific foreign banks highlighted the need for sound risk management in banks – which includes a sufficient excess capital relative to the regulatory requirements.