Credit institutions are facing hard times

Analysis - Financial stability 1st half 2020

Authors Danmarks Nationalbank
Subject Financial stability; Financial risks; Financial regulation; Macroprudential policy; Denmarks Nationalbank´s analyses of financial stability
Type Analysis
Year 2020
Published 27 May 2020
The coronavirus outbreak has influenced banks’ results in the 1st quarter of 2020 reflected in the largest impairment charges for the largest banks since the 2008-09 financial crisis. How severely the economy and the banks will be affected remains highly uncertain. Credit institutions today enjoy both better capitalisation and higher excess liquidity than in the run-up to previous downturns. But it is important for institutions to ensure sufficient distance to the requirement through issuance of MREL-eligible debt instruments.