European Parliament Library

Denmark :, Stress Testing the Banking, Insurance, and Pension Sectors: Technical Note

Abstract
This Technical Note on Stress Testing the Banking, Insurance, and Pension Sectors on Denmark discusses that since the beginning of the global financial crisis, Danish banks have substantially increased their capital buffers. The banks’ capital buffers provide for substantial loss absorbing capacity in case macro-financial conditions deteriorate. Under the most severe stress scenario, the aggregate Tier 1 ratio of large Danish banks drops by almost 4 percentage points, but the solvency position would remain adequate even in such a downturn scenario—underlining the value of solid capital buffers. Under the restrictive assumptions of the stress test, the adverse scenarios have large negative effects on the solvency and profitability of life insurance companies. Nonlife insurers would see a small decline in solvency ratios in the first year of the stress test. Though starting from lower solvency levels than life insurers, the aggregated impact on solvency ratios in the adverse scenario is comparably smaller
Table Of Contents
Cover; CONTENTS; GLOSSARY; EXECUTIVE SUMMARY; TABLES; 1. Summary of Recommendations; INTRODUCTION; A. Stress Testing under the Financial Sector Assessment Program; B. Macro-Financial Background and Key Risks; FIGURES; 1. Structure of the Danish Financial System (Share of total assets, 2013); 2. Foreign Exposures; 3. Overview of the Banking Sector; 4. Indicators by Group of Banks; 5. Insurance Sector; 6. Insurance-Investment Assets; 7. Insurance-Bond Investments; 8. Insurance-Interest Rate Guarantees; C. Overview of the Stress Testing Program
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (63 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781498317665

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