The Systemic Risk Council in Denmark: Assessing Strengths and Weaknesses

Abstract

Like similar bodies in several other countries, the Systemic Risk Council in Denmark was established in response to the global financial crisis. This article first outlines the Council’s design and performance, and then discusses the need for changes to the Council’s remit, governance, powers, and communication with the public. While the design of systemic risk councils varies a lot across countries, and without a consensus on what constitutes an optimal design of a macroprudential policy framework, the Danish experience contributes to the literature on what works, and what does not, in relation to managing systemic risks.