On the recommendation of Danmarks Nationalbank, the Ministry of Finance also suspended issuance of Danish government bonds temporarily, and finally an extraordinary increase of the limit on the monetary policy counterparties’ current account deposits at Danmarks Nationalbank was introduced. These measures had the desired effect.
But capital strength cannot be the sole line of defense against the risk of bank instability; if it were, the job of supervisors would be much easier than it is. What is more, the particular path by which stronger capitalization is attained is not a matter of indifference. Micro- and macro-supervisors need to devise a balanced, coordinated modus operandi.