Capital requirements
“Capital requirements” is an expression for how much banks should have in their desk drawer, if financial markets freeze or if a large unexpected loss occurs. Keeping capital for a rainy day is important to avoid a repetition of the financial crisis. Capital requirements cover banks’ equity and liquidity and the requirements are fixed internationally through legislation on the basis of recommendations from i.e. the Basel Committee on Banking Supervision (BCBS).
A more robust banking sector will minimise the likelihood of future financial crises, but it will also reduce banks’ opportunities to lend funds. We need to find the right balance.
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Finance Denmark is a business association for banks, mortgage institutions, asset management, securities trading and investment funds in Denmark. Our members are mortgage institutions, banks, savings banks, cooperative savings banks, Danish branches of foreign banks, asset managers, Danish securities dealers and investment funds.
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