Vulnerabilities and Risks in Denmark’s Nonbank Financial Institutions

Download or read book Vulnerabilities and Risks in Denmark’s Nonbank Financial Institutions written by Ms. Burcu Hacibedel and published by International Monetary Fund. This book was released on 2024-12-24 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.