## Denmark: Financial System Stability Assessment-Press Release; and Statement by the Executive Director for Denmark

_IMF Staff Country Reports, August 12, 2020_

## Source details

**Canonical URL:** [Denmark: Financial System Stability Assessment-Press Release; and Statement by the Executive Director for Denmark](https://www.imf.org/en/publications/cr/issues/2020/08/07/denmark-financial-system-stability-assessment-press-release-and-statement-by-the-executive-49659)

## Other formats

- [Markdown version](/en/publications/cr/issues/2020/08/07/denmark-financial-system-stability-assessment-press-release-and-statement-by-the-executive-49659/index.md)
- [Structured JSON version](/en/publications/cr/issues/2020/08/07/denmark-financial-system-stability-assessment-press-release-and-statement-by-the-executive-49659/index.json)
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## Bibliographic details
- Published: August 12, 2020
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513552965.002

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### Executive summary and context
- Much of the work of the Financial Sector Assessment Program (FSAP) was conducted prior to the COVID-19 pandemic.
- Given the FSAP’s focus on medium-term challenges and vulnerabilities, many findings and recommendations for strengthening policy and institutional frameworks remain pertinent.
- This report:
  - reflects key developments and policy changes since the FSAP mission work was completed,
  - includes illustrative scenarios to quantify the possible implications of the COVID-19 shock on the solvency of systemically important financial institutions (SIFIs).
- Prior to the COVID-19 pandemic, the Danish authorities took important steps to improve financial system resilience:
  - active use of macroprudential tools to bolster the robustness of the financial system,
  - improved supervision of the banking and insurance sectors,
  - recent legislation strengthening anti-money laundering and combating the financing of terrorism (AML/CFT) supervision,
  - major reforms including a new bank resolution framework that considerably improved Denmark’s financial safety net and crisis management frameworks.

### Key findings and observations
- FSAP findings and recommendations remain relevant despite being based largely on pre-pandemic work.
- The report contains illustrative COVID-19 solvency scenarios for SIFIs to quantify potential implications of the shock.
- Authorities’ pre-pandemic reforms enhanced resilience through:
  - macroprudential policy measures,
  - strengthened supervisory practices for banks and insurers,
  - legislative improvements to AML/CFT supervision,
  - a new bank resolution framework improving crisis management.

### Subject areas and keywords
- Subject: Banking, Covered bonds, Financial Sector Assessment Program, Insurance companies, Stress testing
- Keywords: CR, Danish authorities, financial system, FSAP solvency stress test analysis, ISCR, stress test endeavour, th e DFSA

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## Content in this bundle

- **Executive Summary — IMF Financial Sector Assessment Program**
  - [Executive Summary — IMF Financial Sector Assessment Program (Markdown version)](/-/media/files/publications/cr/2020/english/1dnkea2020001.pdf.md){rel="alternate" type="text/markdown"}
  - [Executive Summary — IMF Financial Sector Assessment Program (PDF)](/-/media/files/publications/cr/2020/english/1dnkea2020001.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2020/08/07/denmark-financial-system-stability-assessment-press-release-and-statement-by-the-executive-49659_