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.
Geopolitical uncertainty impacts the risk outlook for the financial sector
High earnings currently strengthen the banks’ protection against losses. The resilience of banks will also be strengthened when the new requirements for operational resilience and capital ratios are implemented in the near future. Risks for the financial sector is influenced by geopolitical tensions that affect cyberthreats as well as changes in global economic policy which can lead to financial market shocks. Both geopolitics and changes in global economic policy can affect financial stability. Challenges related to the green transition can also have a negative impact on the financial sector.
Key messages
Why is it important?
Financial stability is a prerequisite for the financial sector to fulfil its socially critical tasks. Even during a crisis, customers should still be able to borrow money for sound and creditworthy projects and be able to make and receive payments. This requires the financial sector to be resilient enough to withstand economic and financial crises, helping to ensure Denmark has a resilient economy.
Danmarks Nationalbank publishes its Financial stability analysis biannually, which summarises the bank’s assessments of and recommendations for financial stability in Denmark. The analysis sheds light on whether vulnerabilities in the financial system can arise due to the lending, liquidity management or capital planning of credit institutions. It also presents the results of Danmarks Nationalbank’s biannual stress test, which helps to assess whether the largest credit institutions have sufficient capital to handle a sharp economic downturn. The analysis can also cover other issues relevant to financial stability. Examples include pension and life insurance companies, working with cyber risks, digitalisation or the impact of climate change on the financial sector.