Finansiel Stabilitet is an institution that is critical to society in that it, together with the sector, the Danish FSA and Danmark’s Nationalbank, contributes to ensuring financial stability in Denmark. If a credit institution is failing, Finansiel Stabilitet is ready to take it over and provide a safety net for Danish customers to ensure that businesses and individuals have access to their accounts and other payment infrastructure at all times.
Finansiel Stabilitet was established in 2008 as part of the so-called Bank Package I to address the consequences of the international financial crisis and its effects on the financial sector. Although the financial situation in Denmark is very different today, the objective of Finansiel Stabilitet remains to contribute to ensuring financial stability in Denmark by restructuring and resolving failing credit institutions if they are unable to continue operations on their own. In this connection, Finansiel Stabilitet also handles the task under the deposit guarantee scheme of ensuring customers’ access to bank deposits, which are covered up to DKK 745 thousand.
Unlike other EU countries, where failing small financial institutions are generally declared bankrupt, in Denmark failing credit institutions and the like are as a general rule resolved or restructured by Finansiel Stabilitet rather than being declared bankrupt.
To ensure that Finansiel Stabilitet has the funds required for effective crisis management, the institutions that are required to pay contributions have made payments to two funds; the Resolution Fund and the Deposit Guarantee Fund, which are managed by Finansiel Stabilitet.
Finansiel Stabilitet also has the task of to resolving activities taken over from previously failing institutions. While a substantial part thereof has been resolved or divested, a portfolio of exposures remains in the form of claims from estates in bankruptcy, small loans and guarantees and unsold plots of land and securities. The results, if these resolution activities are included in the surplus generated by Bank Package activities.
In connection with its tasks on behalf of the government, Finansiel Stabilitet has also taken on several new areas of activity in recent years. They include the issue of guarantees for loans to buy property in rural districts and the management of assets acquired by the government from mink-related businesses as a consequence of government compensation. The first assets under this latter scheme were taken over by Finansiel Stabilitet in November 2024. A large number of activities are expected to be taken over in 2025 under this scheme.
Finansiel Stabilitet also monitors developments in the EU, which has recently adopted the Insurance Recovery and Resolution Directive, under which the insurance industry will also be covered by a resolution scheme to provide more security for policyholders. In Denmark, Finansiel Stabilitet and the Danish FSA have been jointly appointed as the resolution authority for the insurance industry.
Finansiel Stabilitet's tasks may be summarised as follows:
Contributing to ensuring financial stability in Denmark and ensuring that customers have access to critical financial infrastructure if a financial institution is failing
Maintaining a contingency planning set-up by preparing resolution plans, conducting crisis simulation exercises and exchanging experiences with the resolution authorities in other countries, so that Finansiel Stabilitet is always ready to restructure or resolve a failing financial institution
Managing the Danish Depositor and Investor Guarantee Scheme
Managing the assets of the Resolution Fund and the Deposit Guarantee Fund
Establishing a resolution scheme for the insurance industry to provide security for policyholders in the event of an insurance company failing
Winding up the remaining lending activities taken over from failing institutions
Handling other activities on behalf of the government in dialogue with the Ministry of Industry, Business and Financial Affairs
Finansiel Stabilitet is an independent public company owned by the Danish State through the Danish Ministry of Industry, Business and Financial Affairs.