Greenland’s Financial Regulatory Bodies Take Center Stage: Council Recommends Zero Percent Countercyclical Capital Buffer Rate

Systemic Risk Council Issues Recommendation on Countercyclical Capital Buffer Rate for Island Nation

The Systemic Risk Council, responsible for monitoring and mitigating financial risks in Greenland, has issued a recommendation regarding the country’s countercyclical capital buffer rate. The council, comprising representatives from relevant authorities, discussed the current economic and financial situation in Greenland before arriving at its decision.

Recommendation to Maintain 0% Countercyclical Capital Buffer Rate

According to sources, the council recommends that the countercyclical capital buffer rate for Greenland remain at 0%. This decision was made after considering the island nation’s unique circumstances, with representatives from the Greenlandic self-government participating in the discussion.

Systemic Risk Council Responsibilities

The Systemic Risk Council is responsible for:

• Identifying and monitoring systemic financial risks in Greenland
• Making recommendations on macroprudential initiatives targeted at banks operating in the country
• Addressing these recommendations to the Minister of Industry, Business and Financial Affairs, who sets capital buffer rates in Greenland

Danish Financial Regulation Applied in Greenland

Notably, Danish financial regulation, including EU directives implemented through legislation, is applied in Greenland via special decrees that take into account the island nation’s distinct circumstances. The decree implementing the Systemic Risk Council’s rules came into effect on January 1, 2016, as did the decree determining the countercyclical capital buffer rate.

Quarterly Data and Assessments

Data and assessments related to the council’s decisions are published quarterly, providing insight into the country’s financial landscape.