Financial stability, 2nd half 2013

Authors Danmarks Nationalbank
Subject Financial markets and financial stability; Business enterprises and households; Financial legislation; Financial markets; Financial stability; Financial sector; Stress Tests; Macroprudential policy
Type Financial Stability
Year 2013
Published 13 December 2013
Abstract icon Overall, Danmarks Nationalbank finds that the banks are currently resilient to severe macroeconomic shocks. Since 2008, the banks have focused on strengthening their capital base. It is important that the banks maintain sound excess capital adequacy. According to Danmarks Nationalbank's stress test of the banks' capitalisation, the five systemic banks comply with the capital requirements in all scenarios and their Common Equity Tier 1 capital remains above 8 per cent as will be required in the coming assessment of credit institutions that will be subject to direct supervision by the European Central Bank. The Danish credit institutions are generally well positioned to meet the new capital requirements under the EU Capital Requirements Directive and Regulation, CRD IV/CRR, which will enter into force on 1 January 2014. Furthermore, in Danmarks Nationalbank's assessment, most credit institutions already have sufficient equity capital to meet the fully phased-in EU capital requirements in 2019. However, many credit institutions will need to replace all or part of their subordinated capital with new issuances meeting the new criteria under CRD IV/CRR.