Risks are building up in the financial sector

Analysis - November 2017 - No. 23

Authors Danmarks Nationalbank
Subject Financial stability; Financial risks; Financial regulation; Macroprudential policy; Denmarks Nationalbank´s analyses of financial stability
Type Analysis
Year 2017
Published 29 November 2017
There is a sentiment of optimism in the financial sector. Profits of the credit institutions are rising, and a considerable lending capacity has been built up. This increases credit institutions’ risk appetite, which is reflected in easing of credit standards. Several credit institutions are increasing lending to cyclical industries and to vulnerable households with high debt ratios. At the same time, rising house prices mean that credit growth may take off suddenly.