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International Monetary Fund. Monetary and Capital Markets Department
COVID-19 pandemic: The Financial Sector Assessment Program (FSAP) work was conducted prior to the COVID-19 pandemic, so this Technical Note (TN) does not assess the impact of the crisis or the recent crisis-related policy measures. Nonetheless, given the FSAP’s focus on vulnerabilities and policy frameworks, the findings and recommendations of the TN remain pertinent. While Denmark’s institutional arrangements are uncommon, the authorities have undertaken several macroprudential measures since the last FSAP. The Minister for Industry, Business and Financial Affairs (MIBFA) has decision-making power over most macroprudential tools in Denmark, which is rare in international practice. However, the Systemic Risk Council (SRC), which includes members from the Danmarks Nationalbank (DN) and Danish Financial Supervisory Authority (DFSA) plays an advisory role and has powers to give recommendations with a comply or explain mechanism. In recent years, the authorities have taken wide-ranging macroprudential policy actions in response to growing systemic vulnerabilities, which have seemed to slow down some of the riskier trends. More recently, in response to the Covid-19 crisis, countercyclical capital buffer (CCyB) has been fully released.
International Monetary Fund. Monetary and Capital Markets Department

and reduce misaligned incentives, and strengthen the resilience of the financial structures. 8. The institutional setup of the SRC provides a special role for DN . The chairman of the Board of Governors of DN chairs the council and DN also performs secretariat services for the SRC. The Secretariat lays out the groundwork for the SRC’s discussion. The SRC secretariat is headed by the DN. The DFSA, the MIBFA and the MoF also participate in the secretariat. The agenda for each meeting is set by the secretariat with approval from the chair, but any member can request

International Monetary Fund
In light of the recent establishment of the Financial Stability Board (FSB) as an association under Swiss law, this paper proposes Fund membership in the new association. The FSB was formed in 2009 and the Fund’s Executive Board approved the Fund’s membership in 2010, which has provided the Fund with the necessary scope to engage and collaborate with the FSB on a wide range of issues of mutual interest. Recently, in response to a request by the G-20 to establish the FSB with a well-defined “legal personality,” the FSB was established as an association under Swiss law. In light of this change, an Executive Board decision is required for the Fund to formally join the Association.
International Monetary Fund. Monetary and Capital Markets Department

make a decision and hence implicitly the hard powers for macroprudential authority lies with the government. 10 32. DN plays an important role in systemic risk monitoring with the SRC providing an enabling environment for coordination on risk assessment and policy formulation . The SRC secretariat, housed in the DN, is responsible for preparing the materials for the SRC’s quarterly discussions. 11 While the secretariat has worked on several thematic issues these are seldom published, notably due to resource constraints. The SRC would benefit from more frequent

International Monetary Fund. Monetary and Capital Markets Department
Much of the work of the Financial Sector Assessment Program (FSAP) was conducted prior to the COVID-19 pandemic. Given the FSAP’s focus on medium-term challenges and vulnerabilities, however, many of its findings and recommendations for strengthening policy and institutional frameworks remain pertinent. This report reflects key developments and policy changes since the FSAP mission work was completed, and includes illustrative scenarios to quantify the possible implications of the COVID-19 shock on the solvency of systemically important financial institutions (SIFIs). Prior to the COVID-19 pandemic, the Danish authorities had taken important steps to improve financial system resilience. The authorities had actively used macroprudential tools to bolster the robustness of the financial system. The supervision of the banking and insurance sectors had improved. Likewise, recent legislation has strengthened anti-money laundering and combating the financing of terrorism (AML/CFT) supervision. Major reforms such as a new bank resolution framework had also considerably improved Denmark’s financial safety net and crisis management frameworks.