The National Bank of Denmark published its biannual Financial Stability analysis, concluding that the Danish financial sector remains resilient amid global uncertainty. Banks’ earnings are high and customer losses remain limited, and the central bank’s stress test indicates all credit institutions would be able to withstand a severe recession scenario. Resilience is linked to a robust economy with high employment and to post-crisis regulation that has left banks significantly better capitalised than before. The analysis also points to a more complex threat landscape from geopolitical tensions, including hybrid threats to critical infrastructure, with a separate survey finding generally high resilience to cyberattacks and other operational incidents but identifying areas for further strengthening and follow-up engagement with the sector. On housing, a new central bank analysis describes a two-speed market, with strong momentum and sharp price increases in the Capital Region alongside more subdued national price growth and moderate lending, while warning that rapid price rises can become self-reinforcing and underscoring the role of lending rules and sound credit practices in limiting excessive household debt.
National Bank of Denmark 2025-11-25
National Bank of Denmark financial stability review finds banks withstand severe recession stress test and highlights cyber and Capital Region house price risks
The National Bank of Denmark's biannual Financial Stability analysis confirms the resilience of the Danish financial sector, highlighting strong bank earnings and limited customer losses, with stress tests showing credit institutions can endure a severe recession. The report also notes a complex threat landscape from geopolitical tensions and a two-speed housing market, emphasizing the importance of lending rules and sound credit practices.