Financial Stability In An Evolving Regulatory And Supervisory Landscape

Yingbin Xiao

No 2013/047, IMF Working Papers from International Monetary Fund

Abstract: This 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. However, vulnerabilities remain. To mitigate risks, banks should continue to build more robust capital and liquidity buffers, and 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.

Keywords: WP; bank; bank assets; mortgage; mortgage bank; asset; Danish banks; regulation and supervision; macroprudential and microprudential policies; covered bonds; systemic risk; SIFI; deposit insurance; crisis resolution; bail-in; risk-weighted assets; asset quality; covered bond holder; mortgage lending; liquidity support facilities; impairment charge; loss impairment; Mortgages; Loans; Financial sector stability; Collateral; Central and Eastern Europe; Global; Middle East; Asia and Pacific; Baltics (search for similar items in EconPapers)
Pages: 18
Date: 2013-02-25
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