12 August 2020
The International Monetary Fund (IMF) has carried out an indepth analysis of the Danish financial system. The analysis has been carried out in the context of the IMF's Financial Sector Assessment Program (FSAP), the aim of which is to reduce the risk of financial crises.
In its report, the IMF finds that the resilience of the Danish financial system has been strengthened since its most recent assessment from 2014. This is attributable mainly to the activation of macroprudential instruments, improved supervision of banks and insurers, and strengthened crisis management frameworks.
In connection with the report, the IMF has carried out a stress test of the largest financial institutions in Denmark. The results of the stress test are in line with the results of Danmarks Nationalbank's stress test, which shows that the systemic banks can cope with a tough covid-19 scenario and still fulfil the minimum legal capital requirements.
The IMF acknowledges the fact that Danmarks Nationalbank quickly made liquidity available to banks and mortgage credit institutions following the outbreak of covid-19.
The IMF makes a number of recommendations, which Danmarks Nationalbank and other Danish authorities will take into account in their continued efforts to ensure a robust financial sector in Denmark.
The purpose of the FSAP is to reduce the risk of crises in the international financial markets. Denmark is on the IMF's list of countries with a systemically important financial sector, and the IMF therefore carries out an assessment of Denmark's financial sector approximately every five years.
The IMF report can be found on the IMF website or via link on Danmarks Nationalbank's website.
Enquiries can be directed to press advicer Ole Mikkelsen on tel. +45 3363 6027.