In connection with the FSAP a stress test was conducted to assess whether the Danish financial system is robust to cyclical changes. The basis for the stress test included Danmarks Nationalbank's macro model, MONA, and a stress test module that we have estimated. The worst-case scenario applied by the IMF involves a slowdown of the domestic economy, exacerbated by monetary-policy tightening by the ECB.
House prices will fall by 30 per cent and GDP by 3 per cent over a 3-year period. A strong cocktail indeed.