The countercyclical capital buffer in the Faroe Islands and Greenland
The Systemic Risk Council can make recommendations on buffer rates in the Faroe Islands and Greenland, as it can for the Danish buffer rate. The Council will assess the level of the buffer rates on an ongoing basis. In the event of changes to the buffer rates, the Council will publish a recommendation addressed to the Minister for Business and Growth. The Minister is responsible for setting the buffer rates for Denmark, the Faroe Islands and Greenland on a quarterly basis.
The buffer rates for the Faroe Islands and Greenland are set with a lag of one quarter relative to the Danish buffer rate. This is because the authorities in the Faroe Islands and Greenland must be consulted before any change is made to the relevant countercyclical buffer rate, including the first time it is set to more than zero.
Danish financial regulation, including Danish legislation implementing EU directives, is implemented in the Faroe Islands and Greenland via decrees that may take into account special Faroese or Greenlandic circumstances. The decrees whereby the rules on the Systemic Risk Council enter into force in the Faroe Islands and Greenland took effect on 1 February 2015 and 1 January 2016, respectively. The decrees concerning determination of the countercyclical capital buffer took effect on 1 July 2015 for the Faroe Islands and 1 January 2016 for Greenland.