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

Stress tests, 2nd half 2012

Overall, the liquidity situation of the largest Danish banks is good. Several small and medium-sized banks are preparing for the expiry of the individual government guarantees and have come far in adjusting their business models towards relying less on short-term funding. Danmarks Nationalbank's stress test of the banks' capitalisation shows that the largest Danish banks are robust. The excess capital adequacy of the four banks included in the European Banking Authority's, EBA's, capital exercise via Danish credit groups remains positive in all Danmarks Nationalbank's stress test scenarios, and Common Equity Tier 1 capital remains higher than 9 per cent, which was the requirement in the EBA's capital exercise – even if government capital injections are not included. Three of the small banks included in the stress test will need to strengthen their capitalisation in the baseline scenario of the stress test, and one bank is close to the threshold. The assessment is that any problems arising among the small banks can be solved via business adjustments or within the current framework for mergers and resolution without significantly influencing financial stability in Denmark.