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.
A gradual green transition supports financial stability
Danmarks Nationalbank has performed a climate stress test to highlight transition risks in the banking sector. The analysis shows that the banks are generally well equipped to handle transition risks. However, a drastic transition in which the banks need to make large impairment charges over a short time frame may result in a capital shortfall. The banks should take climate risks into account in their risk management and capital planning.