Broad political agreement behind new bank deal
New banking regulations were established today with wide political agreement. All parliamentary parties, with the exception of the far-left Enhedslisten, signed on to the plan created by the business and growth minister, Henrik Sass Larsen (Socialdemokraterne).
The agreement includes three main points. Firstly, it establishes more control and tighter regulations on Denmark's 'systematically important financial institutions' (SIFIs) – i.e. banks that have been deemed 'too big to fail'. The banks will be required to be better capitalised than other institutions.
Secondly, banks and mortgage lenders will face tightened restrictions on capital and liquidity and finally, the new rules also establish a special board for financial watchdog group Finanstilsynet to oversee the credit sector.
"By reaching this agreement, we are sending a clear message that Denmark has a strong sector of banks and mortgage-credit institutions," Sass Larsen said. "Stability and confidence in our banks and mortgage institutions will promote growth and employment in Denmark. With the agreement, we therefore take yet another step in bringing the Danish economy back on track."
Seven banks are expected to be identified as 'too big to fail' under the deal: Danske Bank, Nykredit, Nordea Bank Danmark, Jyske Bank, BRFkredit, Sydbank and DLR Kredit. DLF Kredit is a new addition to a list that was identified in March.