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.
Credit institutions are facing hard times
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.