Denmark doubles capital buffer to contain wider Danske Bank risks

Re:Denmark doubles capital buffer to contain wider Danske Ba... by cirgue on Tuesday September 25, 2018 @02:45PM (#18069228)

This is a somewhat minor point, but it surprised me that the edit: Danish reserve requirement has been raised to 1%. In the US, it's at roughly 10% and has historically been between 8 and 12% for large banks. Does anyone more familiar with Danish banking know why their reserve requirement is so low compared to ours?

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Re:Denmark doubles capital buffer to contain wider Danske Ba... by wjnc on Tuesday September 25, 2018 @03:19PM (#18069548)

It's Denmark, not the Netherlands we are talking about. Your intuition seems correct [1]. The 1% capital requirement in the Reuters article must be an add-on requirement and is to low to be the stand-alone requirement. Fitch put Danske at 4.2% Basel III 'fully loaded' last summer. The wiki points out how diverse the calculations can turn out so that it's pretty much pears and apples comparing these internationally.

[1] https://en.m.wikipedia.org/wiki/Capital_requirement

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Re:Denmark doubles capital buffer to contain wider Danske Ba... by venantius on Tuesday September 25, 2018 @05:11PM (#18070512)

The 1% refers to a specific sub-segment of the overall capital requirements. This would be on top of any normal Basel III requirements and is typically marked as a "discretionary" capital buffer to be set by the state in question.

EDIT: Ah, nuts, meant to reply to grandparent rather than parent. Oh well.

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