Analyses focus on current issues of particular relevance to Danmarks Nationalbank’s objectives. The analyses may also contain Danmarks Nationalbank’s recommendations. They include our projections for the Danish economy and our assessment of financial stability. Analyses are targeted at people with a broad interest in economic and financial matters.

Financial stability and financial risks

Financial stability 2010

The banking institutions' earnings in 2009 were affected by the Danish and international economic slowdown, and write-downs on loans were generally substantial. The banking institutions improved their capital bases during the year. According to Danmarks Nationalbank's stress test, the major Danish banking institutions generally have sufficient capital buffers to weather the expected economic development until 2012. The banking institutions' write-downs in 2010 are expected to be slightly lower than in 2009, but will remain relatively high. A few institutions may find it difficult to meet the statutory solvency requirement. Liquidity has improved over the past year for the banking institutions overall, although there is pronounced dispersion between the institutions. The institutions need to be prepared for the expiry of the general government guarantee on 30 September 2010. This includes exploiting the opportunity of buying individual government guarantees if required.