Selected Issues Papers

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

By Burcu Hacibedel, Mariusz Jarmuzek

December 24, 2024

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Format: Chicago

Burcu Hacibedel, and Mariusz Jarmuzek. "Vulnerabilities and Risks in Denmark’s Nonbank Financial Institutions: Denmark", Selected Issues Papers 2024, 044 (2024), accessed December 26, 2024, https://doi.org/10.5089/9798400296628.018

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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. 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.

Subject: Asset and liability management, Covered bonds, Expenditure, Financial contagion, Financial institutions, Financial sector policy and analysis, Financial sector stability, Insurance companies, Liquidity, Mutual funds, Nonbank financial institutions, Pension spending, Systemic risk, Systemic risk assessment

Keywords: Balance sheet analysis, Covered bonds, Denmark, Financial contagion, Financial sector stability, Insurance companies, Liquidity, Mutual funds, Non-bank financial institutions, Nonbank financial institutions, Pension spending, Surveillance, Systemic risk, Systemic risk assessment, Systemic risk assessment

Publication Details

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