{
  "title": "Vulnerabilities and Risks in Denmark’s Nonbank Financial Institutions: Denmark",
  "publication": "Selected Issues Papers, December 24, 2024",
  "sourceUrl": "https://www.imf.org/en/publications/selected-issues-papers/issues/2024/12/24/vulnerabilities-and-risks-in-denmarks-nonbank-financial-institutions-denmark-560015",
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  "summary": "Denmark’s nonbank financial institutions (NBFI) sector has substantially increased in size since the Global Financial Crisis (GFC), becoming an important part of the financial system.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Denmark’s nonbank financial institutions (NBFI) sector has substantially increased in size since the Global Financial Crisis (GFC), becoming an important part of the financial system.\n- Systemic risk associated with NBFIs have been contained but warrants close monitoring, especially regarding leverage, liquidity buffers, and interconnectedness.\n- There are important mitigating factors that reduce systemic risk stemming from NBFIs in Denmark.\n- Strengthening of systemic risk assessment and policy framework for NBFIs is warranted and could include developing a systemic risk assessment framework covering both banks and NBFIs and an ensuing system-wide stress testing framework."
    },
    {
      "heading": "Key findings and risks",
      "content": "- NBFI sector growth: substantial increase in size since the GFC, now an important part of the financial system.\n- Main vulnerabilities to monitor:\n  - Leverage\n  - Liquidity buffers\n  - Interconnectedness\n- Current systemic risk: contained but requires close monitoring."
    },
    {
      "heading": "Mitigating factors",
      "content": "- The source notes the existence of important mitigating factors that reduce systemic risk stemming from NBFIs in Denmark (details as described in the publication)."
    },
    {
      "heading": "Policy recommendations",
      "content": "- Strengthen systemic risk assessment and policy framework for NBFIs.\n- Develop a systemic risk assessment framework covering both banks and NBFIs.\n- Establish a system-wide stress testing framework that includes both banks and NBFIs."
    },
    {
      "heading": "Metadata and classification",
      "content": "- Authors: Burcu Hacibedel, Mariusz Jarmuzek\n- Publication date: December 24, 2024\n- Series: Selected Issues Paper No. 2024/044\n- Issue: 044\n- Volume: 2024\n- Pages: 21\n- DOI: https://doi.org/10.5089/9798400296628.018\n- Stock No: SIPEA2024044\n- ISBN: 9798400296628\n- ISSN: 2958-7875\n- Subjects: Covered bonds, Financial institutions, Financial sector policy and analysis, Mutual funds, Nonbank financial institutions, Systemic risk, Systemic risk assessment\n- Keywords: asset liability management risk, balance sheet analysis, covered bond bond market, Covered bonds, D. mitigating factor, Denmark, Denmark's nonbank financial institutions, Global, Mutual funds, NBFI sector, non-bank financial institutions, Nonbank financial institutions, Systemic risk, systemic risk assessment\n\nSource: Vulnerabilities and Risks in Denmark’s Nonbank Financial Institutions: Denmark (Selected Issues Papers), Burcu Hacibedel and Mariusz Jarmuzek, December 24, 2024.\n\n---\n\n Content in this bundle\n\n- An Overview of the Danish Covered Bond Market\n  - An Overview of the Danish Covered Bond Market (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - An Overview of the Danish Covered Bond Market (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/selected-issues-papers/issues/2024/12/24/vulnerabilities-and-risks-in-denmarks-nonbank-financial-institutions-denmark-560015"
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    "Authors: Burcu Hacibedel, Mariusz Jarmuzek",
    "Published: December 24, 2024",
    "Series: Selected Issues Papers",
    "DOI: https://doi.org/10.5089/9798400296628.018",
    "Denmark’s nonbank financial institutions (NBFI) sector has substantially increased in size since the Global Financial Crisis (GFC), becoming an important part of the financial system.",
    "Systemic risk associated with NBFIs have been contained but warrants close monitoring, especially regarding leverage, liquidity buffers, and interconnectedness.",
    "There are important mitigating factors that reduce systemic risk stemming from NBFIs in Denmark.",
    "Strengthening of systemic risk assessment and policy framework for NBFIs is warranted and could include developing a systemic risk assessment framework covering both banks and NBFIs and an ensuing system-wide stress testing framework.",
    "NBFI sector growth: substantial increase in size since the GFC, now an important part of the financial system.",
    "Main vulnerabilities to monitor:",
    "Current systemic risk: contained but requires close monitoring.",
    "The source notes the existence of important mitigating factors that reduce systemic risk stemming from NBFIs in Denmark (details as described in the publication).",
    "Strengthen systemic risk assessment and policy framework for NBFIs.",
    "Develop a systemic risk assessment framework covering both banks and NBFIs.",
    "Establish a system-wide stress testing framework that includes both banks and NBFIs.",
    "Authors: Burcu Hacibedel, Mariusz Jarmuzek",
    "Publication date: December 24, 2024",
    "Series: Selected Issues Paper No. 2024/044",
    "Issue: 044",
    "Volume: 2024",
    "Pages: 21",
    "DOI: https://doi.org/10.5089/9798400296628.018",
    "Stock No: SIPEA2024044",
    "ISBN: 9798400296628",
    "ISSN: 2958-7875",
    "Subjects: Covered bonds, Financial institutions, Financial sector policy and analysis, Mutual funds, Nonbank financial institutions, Systemic risk, Systemic risk assessment",
    "Keywords: asset liability management risk, balance sheet analysis, covered bond bond market, Covered bonds, D. mitigating factor, Denmark, Denmark's nonbank financial institutions, Global, Mutual funds, NBFI sector, non-bank financial institutions, Nonbank financial institutions, Systemic risk, systemic risk assessment",
    "**An Overview of the Danish Covered Bond Market**"
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