Denmark: Crisis Management, Bank Resolution, and Financial Sector Safety Nets: Technical Note
IMF Staff Country Reports, December 18, 2014
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- Denmark: Crisis Management, Bank Resolution, and Financial Sector Safety Nets: Technical Note
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Bibliographic details
- Published: December 18, 2014
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781498396646.002
Summary
- This paper discusses findings and recommendations made in the Financial Sector Assessment Program Update for Denmark in the areas of crisis management, bank resolution, and financial-sector safety nets.
- The Danish resolution scheme has allowed the authorities to deal with mounting distress while minimizing costs for taxpayers.
- The scheme has enabled the orderly winding-up of the affected banks by providing for a transfer of all assets, and part of the liabilities, to the Financial Stability Company or third-party acquirers.
- The authorities are encouraged to further strengthen the resolution framework in line with the Bank Recovery and Resolution Directive and emerging international good practices.
Findings on the Danish resolution scheme
- Allowed authorities to deal with mounting distress while minimizing costs for taxpayers.
- Enabled orderly winding-up through transfer of all assets, and part of the liabilities, to the Financial Stability Company or third-party acquirers.
Policy recommendations and guidance
- Further strengthen the resolution framework in line with the Bank Recovery and Resolution Directive.
- Align the resolution framework with emerging international good practices.
Subjects and keywords
- Subject: Bank resolution, Bank resolution framework, Banking, Crisis management, Crisis resolution, Financial crises
- Keywords: bank management, bank Package IV, Bank resolution, Bank resolution framework, bank resolution technique, banking system, banks insolvent, bridge bank, CR, Crisis management, Crisis resolution, depositor preference, financial crisis, Global, ISCR, nonsubordinated liability, Package III, resolution action, Resolution authorities, resolution authority, resolution regime, short term