Regulatory Alerts2026-04-30
Danish Financial Supervisory Authority's Expectations Regarding Capital Plans and Targets
Issued by the Danish Financial Supervisory Authority on 7 November 2018, this document establishes regulatory capital requirements and formal expectations for capital planning and buffer maintenance across credit institutions and insurance companies to prevent future financial crises. It mandates that financial firms maintain robust, forward-looking capital plans that account for business models, economic cycles, and regulatory standards, while detailing the automatic restrictions, capital conservation measures, and potential state intervention triggered by breaches of Pillar 1, Pillar 2, buffer, or write-down eligible liability requirements. The guidance emphasizes higher capital buffers, stricter dividend policies, and risk-based solvency calculations under Solvency II to ensure sector resilience and protect depositors, policyholders, and the broader economy from pro-cyclical stress and systemic contagion.