## Vulnerabilities and Risks in Denmark’s Nonbank Financial Institutions: Denmark

_Selected Issues Papers, December 24, 2024_

## Source details

**Canonical URL:** [Vulnerabilities and Risks in Denmark’s Nonbank Financial Institutions: Denmark](https://www.imf.org/en/publications/selected-issues-papers/issues/2024/12/24/vulnerabilities-and-risks-in-denmarks-nonbank-financial-institutions-denmark-560015)

## Other formats

- [Markdown version](/en/publications/selected-issues-papers/issues/2024/12/24/vulnerabilities-and-risks-in-denmarks-nonbank-financial-institutions-denmark-560015/index.md)
- [Structured JSON version](/en/publications/selected-issues-papers/issues/2024/12/24/vulnerabilities-and-risks-in-denmarks-nonbank-financial-institutions-denmark-560015/index.json)
- [Bundle manifest](/en/publications/selected-issues-papers/issues/2024/12/24/vulnerabilities-and-risks-in-denmarks-nonbank-financial-institutions-denmark-560015/bundle-manifest.json)

## Bibliographic details
- Authors: Burcu Hacibedel, Mariusz Jarmuzek
- Published: December 24, 2024
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798400296628.018

---

### 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.
- 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.

### Key findings and risks
- NBFI sector growth: substantial increase in size since the GFC, now an important part of the financial system.
- Main vulnerabilities to monitor:
  - Leverage
  - Liquidity buffers
  - Interconnectedness
- Current systemic risk: contained but requires close monitoring.

### Mitigating factors
- The source notes the existence of important mitigating factors that reduce systemic risk stemming from NBFIs in Denmark (details as described in the publication).

### Policy recommendations
- 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.

### Metadata and classification
- 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

*Source: Vulnerabilities and Risks in Denmark’s Nonbank Financial Institutions: Denmark (Selected Issues Papers), Burcu Hacibedel and Mariusz Jarmuzek, December 24, 2024.*

---

## Content in this bundle

- **An Overview of the Danish Covered Bond Market**
  - [An Overview of the Danish Covered Bond Market (Markdown version)](/-/media/files/publications/selected-issues-papers/2024/english/sipea2024044.pdf.md){rel="alternate" type="text/markdown"}
  - [An Overview of the Danish Covered Bond Market (PDF)](/-/media/files/publications/selected-issues-papers/2024/english/sipea2024044.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2024/12/24/vulnerabilities-and-risks-in-denmarks-nonbank-financial-institutions-denmark-560015_