## Denmark: Financial Sector Assessment Program: Technical Note: Stress Testing

_IMF Staff Country Reports, March 23, 2007_

## Source details

**Canonical URL:** [Denmark: Financial Sector Assessment Program: Technical Note: Stress Testing](https://www.imf.org/en/publications/cr/issues/2016/12/31/denmark-financial-sector-assessment-program-technical-note-stress-testing-20601)

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## Bibliographic details
- Published: March 23, 2007
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451811223.002

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### Overview
- Title: Denmark: Financial Sector Assessment Program: Technical Note: Stress Testing
- Date: March 23, 2007
- Series: Country Report No. 2007/125
- Summary: This technical note describes the stress testing exercises carried out for the Danish commercial banking system and the insurance sector. The tests were conducted as part of the Financial Sector Assessment Program for Denmark and were developed in collaboration with the Danish Financial Supervisory Agency (DFSA) and Danmarks Nationalbank (DNB). Two approaches—bottom-up and top-down—were employed in the analysis. Results of the stress test show that under changing macroeconomic conditions, credit risk could materialize, causing a substantial deterioration in banks’ results.

### Methodology
- Approaches used:
  - Bottom-up
  - Top-down
- Sectors covered:
  - Danish commercial banking system
  - Insurance sector
- Collaboration: Developed in collaboration with the Danish Financial Supervisory Agency (DFSA) and Danmarks Nationalbank (DNB)

### Key Findings and Results
- Under changing macroeconomic conditions, credit risk could materialize.
- Credit risk materialization could cause a substantial deterioration in banks’ results.

### Subjects and Keywords
- Subject: Banking, Credit, Credit risk, Financial institutions, Financial regulation and supervision, Financial sector policy and analysis, Loans, Market risk, Money, Stress testing
- Keywords: bank concentration, banks funding, capital base, CR, Credit, Credit risk, credit risk measurement, Europe, foreign exchange, ISCR, loan portfolio, Loans, Market risk, model validation, portfolio credit risk stress tests, staff estimation, Stress testing, unexpected loss, yield curve

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## Content in this bundle

- **Financial Sector Assessment Program — Denmark: Technical Note Stress Testing**
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_Source: https://www.imf.org/en/publications/cr/issues/2016/12/31/denmark-financial-sector-assessment-program-technical-note-stress-testing-20601_