The Danish Financial Supervisory Authority has published its takeaways from late-April 2025 discussions with the largest Danish banks and mortgage credit institutions on how recent US developments, including the introduction of tariffs, other political measures and a weaker US dollar, are affecting credit risk and impairment needs. The authority concludes that uncertainty has risen and negative scenarios have become more likely, and it expects institutions to strengthen follow-up and analysis of the most exposed customers and portfolios and to ensure impairments reflect the higher probability and size of potential losses, including through management judgement where models do not capture the deteriorated risk picture. Institutions assessed the current increase in credit risk as limited but subject to significant uncertainty, driven by direct tariff effects on customers’ earnings and indirect effects such as weaker demand, disrupted supply chains, higher costs, lower consumer confidence and possible deterioration in inflation, interest rates, employment and growth. The analysis highlights potential impacts across sectors including export-dependent businesses and cyclical, consumer-facing firms, with some customers already affected and others likely to feel effects later, while private customers were not seen as impacted at this stage. The authority also points to the importance of intensified customer dialogue and robust data quality when identifying exposures (for example via export markets, US dollar usage, steel usage and changes in credit facility utilisation), and notes that US developments have made the negative macro scenario materially worse in impairment calculations, increasing provisions and contributing to movements from accounting stage 1 to stage 2. The authority notes that the largest institutions’ credit risk management and impairment assessments linked to US developments are ongoing and should be continuously adjusted as conditions evolve.

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