Financial Stability In An Evolving Regulatory And Supervisory Landscape

IMF Working Papers, February 25, 2013

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The paper runs qualitative and quantitative analyses of the financial soundness of Danish banks.
Helped by a series of Denmark’s financial policy initiatives, banks have made progress in improving financial stability.
Vulnerabilities remain in the Danish banking sector.
To mitigate risks, banks should continue to build more robust capital and liquidity buffers.
Banks should enhance further the transparency of disclosures.
The flexibility embedded in EU regulations should be used to design strong prudential policies, treating Basel III and the CRD IV regulations as floors.
Crisis prevention and management could be further strengthened by phasing out gradually deferred-amortization mortgage loans and introducing risk-adjusted deposit insurance premia.

Research approach: qualitative and quantitative analyses focused on Danish banks.
Sectoral focus and themes: Banking; Collateral; Covered bonds; Financial institutions; Financial sector policy and analysis; Financial sector stability; Loans; Mortgages.
Geographic/keyword tags include: Asia and Pacific, Baltics, Central and Eastern Europe, Danish banks, Global, Middle East, and others listed under Keywords.

Continue building more robust capital buffers.
Continue building more robust liquidity buffers.
Enhance transparency of disclosures.
Use flexibility in EU regulations to design prudential policies that treat Basel III and CRD IV as minimum standards (floors).
Phase out gradually deferred-amortization mortgage loans.
Introduce risk-adjusted deposit insurance premia.

IMF Working Papers — Financial Stability In An Evolving Regulatory And Supervisory Landscape (Yingbin Xiao, February 25, 2013).