ebooks and download videos Search All  Title  Author 
Home / Nonfiction / Business & Economics / International / Economics

Denmark: Financial System Stability Assessment

| £7.50 | €8.43 | Ca$12.17 | Au$12.01
by International Monetary Fund. Department
What is this?DRM-EPUB | by download   add to wish list
Denmark: Financial System Stability Assessment by International Monetary Fund. Department

EXECUTIVE SUMMARY The Danish authorities have taken important steps in recent years to improve financial system resilience. Financial regulation and supervision have been strengthened. A new bank resolution framework that includes bail-in of creditors has been adopted and deployed to resolve small and medium-sized banks. An institutional framework for macroprudential policy has also been adopted. Recent legislation requires maturity extension of covered bonds in stress situations, with the aim of reducing refinancing risk in the mortgage finance system. Although stress tests suggest that financial stability risks are contained, the financial system's large size and interconnectedness call for additional measures to further strengthen resilience. In a severe stress scenario, solvency levels at large banks and mortgage credit institutions (MCIs) remain well above regulatory requirements, owing to high current capital ratios. Stress tests also suggest that concentration risk and extreme increases in covered bond spreads would be manageable. However, this analysis cannot fully capture second-round and non-linear effects, and so may underestimate contagion risks that are material in light of the large size and interconnectedness of balance sheets in Denmark. For this reason, staff recommends the measures described below to further enhance systemic resilience. Given that covered bonds backed by mortgage loans are at the heart of the financial system, risks in mortgage finance should be reduced. The mortgage finance system has a long history of good performance based on important strengths, including a "balance principle" that limits most non-credit risks. However, the rapid growth of adjustable-rate and interest-only (IO) mortgage loans have increased the share of long-term loans funded by short-term covered bonds (refinancing risk), increased the risk of payment difficulties when interest rates rise (credit risk), and reduced resilience to house price declines. It would be advisable to use regulatory policies to encourage longer bond maturities, ensure that eventual interest-rate increases are better reflected in loan pricing and approvals, and increase buffers in loans with interest-only periods, e.g. by reducing the loan-to-value (LTV) ceiling. The proposed prudential limits on MCIs' higher-risk activities are welcome. Prudential supervision is generally sound, but there is scope for further improvement. The intensity of the risk-based approach and the early and firm enforcement policy are areas of strength. However, additional resources are needed to increase the frequency of onsite inspections, including for AML/CFT supervision, and the operational independence of the Danish Financial Supervisory Authority (DFSA) should be ensured. In banking supervision, the information on operational and market risk that is reported routinely should be broadened, and systemic review of Pillar III disclosures should be implemented. In insurance supervision, a minimum solvency level should be established, and assessments of companies' governance and management-as well as the supervision of market conduct, fraud, and AML/CFT-should be enhanced.

To view this DRM protected ebook on your desktop or laptop you will need to have Adobe Digital Editions installed. It is a free software. We also strongly recommend that you sign up for an AdobeID at the Adobe website. For more details please see FAQ 1&2. To view this ebook on an iPhone, iPad or Android mobile device you will need the Adobe Digital Editions app, or BlueFire Reader or Txtr app. These are free, too. For more details see this article.

SHARE  Share by Email  Share on Facebook  Share on Twitter  Share on Linked In  Share on Delicious
or call in the US toll free 1-888-866-9150 product ID: 676210

Ebook Details
Pages: 50
Size: 4.4 MB
Date published:   2014
ISBN: 9781498322775 (DRM-EPUB)

DRM Settings
Copying:of 20 selections every 20 days allowed
Printing:of 20 pages every 20 days allowed
Read Aloud:  not allowed

This product is listed in the following categories:

Nonfiction > Business & Economics > Money & Monetary Policy
Nonfiction > Political Science > Public Policy > Economic Policy
Nonfiction > Business & Economics > International > Economics

This author has products in the following categories:

Nonfiction > Business & Economics
Nonfiction > Law
Nonfiction > Business & Economics > Money & Monetary Policy
Nonfiction > Business & Economics > Finance
Nonfiction > Business & Economics > Banks & Banking
Nonfiction > Business & Economics > Investments & Securities
Nonfiction > Business & Economics > Insurance > Risk Assessment & Management
Nonfiction > Business & Economics > Labor
Nonfiction > Business & Economics > International > Economics
Nonfiction > Political Science
Nonfiction > Political Science > Public Policy > Economic Policy
Nonfiction > Business & Economics > Real Estate > Mortgages
Nonfiction > Social Science
Nonfiction > Social Science > Third World Development
Nonfiction > Business & Economics > Economics

If you find anything wrong with this product listing, perhaps the description is wrong, the author is incorrect, or it is listed in the wrong category, then please contact us. We will promptly address your feedback.

© 2016