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Stress test shows Danish banks have sufficient capital -Breaking

by Mike Robinson

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© Reuters. Danish Nationalbank (also known as the Danish Central Bank) is seen in Copenhagen on February 22, 2015. REUTERS/Fabian Bimmer/File photo

COPENHAGEN, (Reuters) –Danish banks have enough capital to withstand a downturn but a handful of systematically important banks may be close to reaching safety buffers. This was revealed by a stress test conducted Thursday by the central bank.

According to the central bank, the stress test proved that banks had sufficient capital to handle a severe recession.

According to the bank, however, systemic banks will fall below their buffer requirements by about 13 Billion Danish crowns (or $1.98 billion) in severe stress scenarios.

Banks should ensure that there is a healthy surplus to meet minimum eligible liabilities (MREL), a well-diversified maturity profile and a longer maturity.

($1 = 6.5701 Danish crowns)

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