A few systemic banks have capital shortfall in severe recession

Analysis - Stresstest - 1st Half 2021

Authors Bentzen, Christian Sinding; Toftegaard Grandjean Helmersen, Olivia
Subject Stress Tests; Financial stability
Type Analysis
Year 2021
Published 27 May 2021
Abstract icon A stress test of the banking sector shows that a few systemic banks fall short of their risk-based capital requirements in a severe recession scenario. Most banks are generally better capitalised than previously, but they are challenged in the stress test by weaker earnings, which means they are less resilient under stress. The stress test also shows that the banks must continuously ensure sufficient surplus relative to the MREL.