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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 hist
by cirgue 8y ago
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?
- wjnc 8y agoIt'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 https://en.m.wikipedia.org/wiki/Capital_requirement
- venantius 8y agoThe 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.