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.
Higher interest rates have strengthened the resilience of banks, but also pose a risk
Higher interest rates make it more expensive for households and companies to service their debt, increasing the risk of losses for institutions. Higher interest rates also contribute to stronger earnings for the institutions, which have also increased their capitalisation. Banks have been structurally strengthened by the regulation introduced after the financial crisis. Geopolitical tensions increase the cyber threat, which can quickly change character if the tensions escalate.
Key messages
Why is it important?
Financial stability is a prerequisite for enabling the financial sector to perform its tasks that are critical to society. Even during a crisis, customers must 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 robust enough to withstand economic and financial crises and contribute to ensuring a robust economy for Denmark.
Danmarks Nationalbank publishes the biannual analysis Financial Stability, which summarises Danmarks Nationalbank’s assessments and recommendations regarding financial stability in Denmark. Among other things, the analysis assesses whether conditions related to credit institutions’ credit granting, liquidity management and capital planning may lead to vulnerabilities in the financial system. The analysis also presents the results of Danmarks Nationalbank’s biannual stress test, which contributes to the assessment of whether the largest credit institutions have sufficient capital to handle an economic recession. The analysis may also focus on other factors of relevance to financial stability. For example, pension and life insurance companies, cyber threats, digitalisation or the impact of climate change on the financial sector.