Danmarks Nationalbank – Geopolitical Uncertainty Impacts the Risk Outlook for the Financial Sector

Danmarks Nationalbank's November 26, 2024, press release highlights that geopolitical tensions are influencing the financial sector's risk outlook. The central bank notes that interest rate hikes in 2022 and 2023 have bolstered bank profits, while loan losses remain limited. However, geopolitical uncertainties, such as cyber threats to critical infrastructure and shifts in global trade, pose potential risks to financial stability. The bank emphasizes the importance of banks maintaining robust risk management practices to navigate these challenges effectively.