Financial stability - Interest rate hikes affect the banks and their customers

Analysis - Financial stability 1st half 2023.pdfFinancial stability 1st half 2023.xlsx

Authors	Danmarks Nationalbank
Subject	Financial stability; Stress Tests; Banks; Denmarks Nationalbank´s analyses of financial stability
Type	Publications
Year	2023
Published	1 June 2023

Higher interest rates and consumer prices are draining the resilience of household customers, with spillover effects on businesses. At the same time, banks are generating increased net interest income because of the development in interest rates. Increased earnings may counter the effect from higher impairment charges, which will be the result of the higher interest rates in the long term. In March, problems in specific foreign banks highlighted the need for sound risk management in banks - which includes a sufficient excess capital relative to the regulatory requirements.

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