Risk-Based Supervision of Pension Institutions in Denmark
This paper examines the move towards risk-based supervision of pension institutions in Denmark. Although Denmark has not adopted a comprehensive model to assess risk it has developed a number of building blocks which it uses for risk-based assessme...
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| Format: | Policy Research Working Paper |
| Language: | English |
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Washington, DC: World Bank
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2008/02/9045914/risk-based-supervision-pension-institutions-denmark http://hdl.handle.net/10986/6594 |
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okr-10986-6594 |
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oai_dc |
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Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCOUNTANT ACCOUNTING ACCOUNTING STANDARDS ANNUAL CONTRIBUTIONS ASSESSMENT OF RISK ASSET ALLOCATION ASSET CLASS ASSET CLASSES ASSET LIABILITY MANAGEMENT ASSET MANAGEMENT ASSET MANAGERS AVERAGE BENEFIT AVERAGE WAGE BALANCE SHEET BALANCE SHEETS BANKRUPTCY BENEFIT PLAN BOND PRICES CALL OPTIONS CAPITAL ADEQUACY CAPITAL BASE CAPITAL BASES CAPITAL OWNERS CAPITAL REQUIREMENT CAPITAL REQUIREMENTS CAPITALIZATION CASH FLOWS COLLECTIVE INVESTMENT COMPANY PENSION CONFLICTS OF INTEREST CONSTANT MATURITY CONTRIBUTION CONTRIBUTION PLANS CONTRIBUTION RATE CORPORATE BONDS COUPON COUPON RATE CREDIT INSTITUTIONS CREDIT RATING CREDIT RATINGS CREDIT RISK CURRENCY CURRENCY RISK CURRENCY RISKS DEBT DEBT INSTRUMENTS DEPOSITOR DEPOSITORS DERIVATIVES DEVELOPING COUNTRIES DISABILITY DISABILITY BENEFITS DISABILITY INSURANCE DISCOUNT RATE DOMESTIC BONDS DOMESTIC EQUITIES EARNINGS ECONOMIC ACTIVITY EMERGING MARKETS EMPLOYER PENSION EQUITIES EQUITY MARKETS EQUITY VALUES EURO MARKET EXTERNAL ASSET FAIR VALUE FAIR VALUES FINANCIAL CRISIS FINANCIAL INFORMATION FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL MANAGEMENT FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL POLICY FINANCIAL SECTOR FINANCIAL STATEMENT FINANCIAL SYSTEM FINANCIAL SYSTEMS FIXED INCOME FOREIGN CURRENCIES FOREIGN EQUITIES FUTURES GOVERNMENT BOND GOVERNMENT BOND YIELDS GOVERNMENT BONDS GOVERNMENT GUARANTEE GOVERNMENT PAPER GUARANTEE FUND HOLDINGS INCOME FROM BONDS INCOME TAX INDEXED BONDS INDIVIDUAL ACCOUNTS INSURANCE INSURANCE COMPANY INSURANCE PRODUCTS INTEREST RATE INTEREST RATE CHANGES INTEREST RATE RISK INTEREST RATE SWAPS INTEREST RATES INTERNAL AUDIT INTERNATIONAL BANK INVESTMENT POLICIES INVESTMENT REGULATIONS INVESTMENT RESTRICTIONS INVESTMENT RETURNS INVESTMENT RISK INVESTMENT RISKS INVESTMENT STRATEGIES INVESTMENTS IN EQUITIES JOINT-STOCK COMPANIES LABOR FORCE LABOR MARKET LEGAL OBLIGATION LEVEL OF RISK LIABILITY LIFE INSURANCE LIFE INSURANCE COMPANIES LONG-TERM INTEREST LONG-TERM INTEREST RATE LUMP SUM LUMP SUMS MARGINAL RATE MARGINAL TAX RATE MARKET CONDITIONS MARKET DEVELOPMENT MARKET DEVELOPMENTS MARKET DISCIPLINE MARKET ENVIRONMENT MARKET INTEREST RATES MARKET PARTICIPANTS MARKET RISK MARKET RISKS MARKET VALUE MARKET VALUES MINIMUM BENEFITS MINIMUM CAPITAL REQUIREMENT MORTGAGE MORTGAGE BONDS MORTGAGE LOANS MORTGAGES OCCUPATIONAL PENSION OCCUPATIONAL PENSION SCHEME OCCUPATIONAL PENSION SCHEMES OCCUPATIONAL PLANS OTHER ASSETS OWNERSHIP STRUCTURES PENSION PENSION ASSETS PENSION BENEFITS PENSION COMPANIES PENSION CONTRACTS PENSION CONTRIBUTIONS PENSION FUND PENSION FUND INVESTMENTS PENSION FUNDS PENSION PLANS PENSION SAVING PENSION SCHEME PENSION SCHEMES PENSION SYSTEM PENSION SYSTEMS PENSIONERS PERSONAL PENSION PERSONAL PENSION PLANS PORTFOLIO PORTFOLIO MANAGEMENT PORTFOLIOS PRIVATE PENSION RATES OF RETURN REAL ESTATE REAL PROPERTY REGULATORY FRAMEWORK REGULATORY STRUCTURE RESERVES RETAIL FINANCIAL SERVICES RETURN RETURNS RISK ASSESSMENT RISK CONTROL RISK EXPOSURE RISK EXPOSURES RISK MANAGEMENT RISK MANAGEMENT SYSTEMS RISK OF DEFAULT RISK PROFILE RISK PROFILES RISK SHARING RISKY ASSETS SAVERS SAVINGS BANKS SECURITIES SHARE OF EQUITIES SHAREHOLDER SHAREHOLDERS SMALL PENSION SOLVENCY SPECIAL SAVINGS SUPERVISION OF PENSION FUNDS SUPERVISORY AUTHORITIES SUPERVISORY AUTHORITY SWAP SWAP CURVE TAX TAX ADVANTAGES TAX INCENTIVES TAX RATE TAX SYSTEM TAXABLE INCOME TAXATION OF INVESTMENT INCOME TOTAL COST TRADE UNIONS TRANSPARENCY UNEMPLOYED USE OF DERIVATIVES VALUABLE VALUATION VARIABLE RATE WAGE WAGES WITHDRAWAL YIELD CURVE ZERO COUPON |
| spellingShingle |
ACCOUNTANT ACCOUNTING ACCOUNTING STANDARDS ANNUAL CONTRIBUTIONS ASSESSMENT OF RISK ASSET ALLOCATION ASSET CLASS ASSET CLASSES ASSET LIABILITY MANAGEMENT ASSET MANAGEMENT ASSET MANAGERS AVERAGE BENEFIT AVERAGE WAGE BALANCE SHEET BALANCE SHEETS BANKRUPTCY BENEFIT PLAN BOND PRICES CALL OPTIONS CAPITAL ADEQUACY CAPITAL BASE CAPITAL BASES CAPITAL OWNERS CAPITAL REQUIREMENT CAPITAL REQUIREMENTS CAPITALIZATION CASH FLOWS COLLECTIVE INVESTMENT COMPANY PENSION CONFLICTS OF INTEREST CONSTANT MATURITY CONTRIBUTION CONTRIBUTION PLANS CONTRIBUTION RATE CORPORATE BONDS COUPON COUPON RATE CREDIT INSTITUTIONS CREDIT RATING CREDIT RATINGS CREDIT RISK CURRENCY CURRENCY RISK CURRENCY RISKS DEBT DEBT INSTRUMENTS DEPOSITOR DEPOSITORS DERIVATIVES DEVELOPING COUNTRIES DISABILITY DISABILITY BENEFITS DISABILITY INSURANCE DISCOUNT RATE DOMESTIC BONDS DOMESTIC EQUITIES EARNINGS ECONOMIC ACTIVITY EMERGING MARKETS EMPLOYER PENSION EQUITIES EQUITY MARKETS EQUITY VALUES EURO MARKET EXTERNAL ASSET FAIR VALUE FAIR VALUES FINANCIAL CRISIS FINANCIAL INFORMATION FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL MANAGEMENT FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL POLICY FINANCIAL SECTOR FINANCIAL STATEMENT FINANCIAL SYSTEM FINANCIAL SYSTEMS FIXED INCOME FOREIGN CURRENCIES FOREIGN EQUITIES FUTURES GOVERNMENT BOND GOVERNMENT BOND YIELDS GOVERNMENT BONDS GOVERNMENT GUARANTEE GOVERNMENT PAPER GUARANTEE FUND HOLDINGS INCOME FROM BONDS INCOME TAX INDEXED BONDS INDIVIDUAL ACCOUNTS INSURANCE INSURANCE COMPANY INSURANCE PRODUCTS INTEREST RATE INTEREST RATE CHANGES INTEREST RATE RISK INTEREST RATE SWAPS INTEREST RATES INTERNAL AUDIT INTERNATIONAL BANK INVESTMENT POLICIES INVESTMENT REGULATIONS INVESTMENT RESTRICTIONS INVESTMENT RETURNS INVESTMENT RISK INVESTMENT RISKS INVESTMENT STRATEGIES INVESTMENTS IN EQUITIES JOINT-STOCK COMPANIES LABOR FORCE LABOR MARKET LEGAL OBLIGATION LEVEL OF RISK LIABILITY LIFE INSURANCE LIFE INSURANCE COMPANIES LONG-TERM INTEREST LONG-TERM INTEREST RATE LUMP SUM LUMP SUMS MARGINAL RATE MARGINAL TAX RATE MARKET CONDITIONS MARKET DEVELOPMENT MARKET DEVELOPMENTS MARKET DISCIPLINE MARKET ENVIRONMENT MARKET INTEREST RATES MARKET PARTICIPANTS MARKET RISK MARKET RISKS MARKET VALUE MARKET VALUES MINIMUM BENEFITS MINIMUM CAPITAL REQUIREMENT MORTGAGE MORTGAGE BONDS MORTGAGE LOANS MORTGAGES OCCUPATIONAL PENSION OCCUPATIONAL PENSION SCHEME OCCUPATIONAL PENSION SCHEMES OCCUPATIONAL PLANS OTHER ASSETS OWNERSHIP STRUCTURES PENSION PENSION ASSETS PENSION BENEFITS PENSION COMPANIES PENSION CONTRACTS PENSION CONTRIBUTIONS PENSION FUND PENSION FUND INVESTMENTS PENSION FUNDS PENSION PLANS PENSION SAVING PENSION SCHEME PENSION SCHEMES PENSION SYSTEM PENSION SYSTEMS PENSIONERS PERSONAL PENSION PERSONAL PENSION PLANS PORTFOLIO PORTFOLIO MANAGEMENT PORTFOLIOS PRIVATE PENSION RATES OF RETURN REAL ESTATE REAL PROPERTY REGULATORY FRAMEWORK REGULATORY STRUCTURE RESERVES RETAIL FINANCIAL SERVICES RETURN RETURNS RISK ASSESSMENT RISK CONTROL RISK EXPOSURE RISK EXPOSURES RISK MANAGEMENT RISK MANAGEMENT SYSTEMS RISK OF DEFAULT RISK PROFILE RISK PROFILES RISK SHARING RISKY ASSETS SAVERS SAVINGS BANKS SECURITIES SHARE OF EQUITIES SHAREHOLDER SHAREHOLDERS SMALL PENSION SOLVENCY SPECIAL SAVINGS SUPERVISION OF PENSION FUNDS SUPERVISORY AUTHORITIES SUPERVISORY AUTHORITY SWAP SWAP CURVE TAX TAX ADVANTAGES TAX INCENTIVES TAX RATE TAX SYSTEM TAXABLE INCOME TAXATION OF INVESTMENT INCOME TOTAL COST TRADE UNIONS TRANSPARENCY UNEMPLOYED USE OF DERIVATIVES VALUABLE VALUATION VARIABLE RATE WAGE WAGES WITHDRAWAL YIELD CURVE ZERO COUPON van Dam, Rein Andersen, Erik Brink Risk-Based Supervision of Pension Institutions in Denmark |
| geographic_facet |
Denmark |
| relation |
Policy Research Working Paper; No. 4540 |
| description |
This paper examines the move towards
risk-based supervision of pension institutions in Denmark.
Although Denmark has not adopted a comprehensive model to
assess risk it has developed a number of building blocks
which it uses for risk-based assessment. The motivations
for improving risk assessment include a desire to identify
emerging problems, and concerns about the solvency of
pension institutions. In Denmark there is extensive use of
guaranteed minimum returns in both the accumulation and
payout phases which create substantial obligations on
pension institutions, and focus attention on the integrity
and solvency of the institutions which provide them. In
conjunction with freeing up investment restrictions and
moving towards market valuation of assets, the supervisor
has introduced a 'traffic light' stress test model
which calculates the effect of several market scenarios -
the red test which is the more plausible and the yellow test
which is possible but less likely. In addition to the use of
the traffic light system, there has been a growing emphasis
on the adequacy of internal risk control systems and greater
reliance on market discipline. Pension institutions have
sought to reduce their exposure to market volatility by
better matching of assets and liabilities. There is a much
better understanding of the risks inherent in the pension
institutions' portfolios, and there has been a
substantial increase in the use of hedging instruments. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
van Dam, Rein Andersen, Erik Brink |
| author_facet |
van Dam, Rein Andersen, Erik Brink |
| author_sort |
van Dam, Rein |
| title |
Risk-Based Supervision of Pension Institutions in Denmark |
| title_short |
Risk-Based Supervision of Pension Institutions in Denmark |
| title_full |
Risk-Based Supervision of Pension Institutions in Denmark |
| title_fullStr |
Risk-Based Supervision of Pension Institutions in Denmark |
| title_full_unstemmed |
Risk-Based Supervision of Pension Institutions in Denmark |
| title_sort |
risk-based supervision of pension institutions in denmark |
| publisher |
Washington, DC: World Bank |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2008/02/9045914/risk-based-supervision-pension-institutions-denmark http://hdl.handle.net/10986/6594 |
| _version_ |
1764400592453632000 |
| spelling |
okr-10986-65942021-04-23T14:02:31Z Risk-Based Supervision of Pension Institutions in Denmark van Dam, Rein Andersen, Erik Brink ACCOUNTANT ACCOUNTING ACCOUNTING STANDARDS ANNUAL CONTRIBUTIONS ASSESSMENT OF RISK ASSET ALLOCATION ASSET CLASS ASSET CLASSES ASSET LIABILITY MANAGEMENT ASSET MANAGEMENT ASSET MANAGERS AVERAGE BENEFIT AVERAGE WAGE BALANCE SHEET BALANCE SHEETS BANKRUPTCY BENEFIT PLAN BOND PRICES CALL OPTIONS CAPITAL ADEQUACY CAPITAL BASE CAPITAL BASES CAPITAL OWNERS CAPITAL REQUIREMENT CAPITAL REQUIREMENTS CAPITALIZATION CASH FLOWS COLLECTIVE INVESTMENT COMPANY PENSION CONFLICTS OF INTEREST CONSTANT MATURITY CONTRIBUTION CONTRIBUTION PLANS CONTRIBUTION RATE CORPORATE BONDS COUPON COUPON RATE CREDIT INSTITUTIONS CREDIT RATING CREDIT RATINGS CREDIT RISK CURRENCY CURRENCY RISK CURRENCY RISKS DEBT DEBT INSTRUMENTS DEPOSITOR DEPOSITORS DERIVATIVES DEVELOPING COUNTRIES DISABILITY DISABILITY BENEFITS DISABILITY INSURANCE DISCOUNT RATE DOMESTIC BONDS DOMESTIC EQUITIES EARNINGS ECONOMIC ACTIVITY EMERGING MARKETS EMPLOYER PENSION EQUITIES EQUITY MARKETS EQUITY VALUES EURO MARKET EXTERNAL ASSET FAIR VALUE FAIR VALUES FINANCIAL CRISIS FINANCIAL INFORMATION FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL MANAGEMENT FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL POLICY FINANCIAL SECTOR FINANCIAL STATEMENT FINANCIAL SYSTEM FINANCIAL SYSTEMS FIXED INCOME FOREIGN CURRENCIES FOREIGN EQUITIES FUTURES GOVERNMENT BOND GOVERNMENT BOND YIELDS GOVERNMENT BONDS GOVERNMENT GUARANTEE GOVERNMENT PAPER GUARANTEE FUND HOLDINGS INCOME FROM BONDS INCOME TAX INDEXED BONDS INDIVIDUAL ACCOUNTS INSURANCE INSURANCE COMPANY INSURANCE PRODUCTS INTEREST RATE INTEREST RATE CHANGES INTEREST RATE RISK INTEREST RATE SWAPS INTEREST RATES INTERNAL AUDIT INTERNATIONAL BANK INVESTMENT POLICIES INVESTMENT REGULATIONS INVESTMENT RESTRICTIONS INVESTMENT RETURNS INVESTMENT RISK INVESTMENT RISKS INVESTMENT STRATEGIES INVESTMENTS IN EQUITIES JOINT-STOCK COMPANIES LABOR FORCE LABOR MARKET LEGAL OBLIGATION LEVEL OF RISK LIABILITY LIFE INSURANCE LIFE INSURANCE COMPANIES LONG-TERM INTEREST LONG-TERM INTEREST RATE LUMP SUM LUMP SUMS MARGINAL RATE MARGINAL TAX RATE MARKET CONDITIONS MARKET DEVELOPMENT MARKET DEVELOPMENTS MARKET DISCIPLINE MARKET ENVIRONMENT MARKET INTEREST RATES MARKET PARTICIPANTS MARKET RISK MARKET RISKS MARKET VALUE MARKET VALUES MINIMUM BENEFITS MINIMUM CAPITAL REQUIREMENT MORTGAGE MORTGAGE BONDS MORTGAGE LOANS MORTGAGES OCCUPATIONAL PENSION OCCUPATIONAL PENSION SCHEME OCCUPATIONAL PENSION SCHEMES OCCUPATIONAL PLANS OTHER ASSETS OWNERSHIP STRUCTURES PENSION PENSION ASSETS PENSION BENEFITS PENSION COMPANIES PENSION CONTRACTS PENSION CONTRIBUTIONS PENSION FUND PENSION FUND INVESTMENTS PENSION FUNDS PENSION PLANS PENSION SAVING PENSION SCHEME PENSION SCHEMES PENSION SYSTEM PENSION SYSTEMS PENSIONERS PERSONAL PENSION PERSONAL PENSION PLANS PORTFOLIO PORTFOLIO MANAGEMENT PORTFOLIOS PRIVATE PENSION RATES OF RETURN REAL ESTATE REAL PROPERTY REGULATORY FRAMEWORK REGULATORY STRUCTURE RESERVES RETAIL FINANCIAL SERVICES RETURN RETURNS RISK ASSESSMENT RISK CONTROL RISK EXPOSURE RISK EXPOSURES RISK MANAGEMENT RISK MANAGEMENT SYSTEMS RISK OF DEFAULT RISK PROFILE RISK PROFILES RISK SHARING RISKY ASSETS SAVERS SAVINGS BANKS SECURITIES SHARE OF EQUITIES SHAREHOLDER SHAREHOLDERS SMALL PENSION SOLVENCY SPECIAL SAVINGS SUPERVISION OF PENSION FUNDS SUPERVISORY AUTHORITIES SUPERVISORY AUTHORITY SWAP SWAP CURVE TAX TAX ADVANTAGES TAX INCENTIVES TAX RATE TAX SYSTEM TAXABLE INCOME TAXATION OF INVESTMENT INCOME TOTAL COST TRADE UNIONS TRANSPARENCY UNEMPLOYED USE OF DERIVATIVES VALUABLE VALUATION VARIABLE RATE WAGE WAGES WITHDRAWAL YIELD CURVE ZERO COUPON This paper examines the move towards risk-based supervision of pension institutions in Denmark. Although Denmark has not adopted a comprehensive model to assess risk it has developed a number of building blocks which it uses for risk-based assessment. The motivations for improving risk assessment include a desire to identify emerging problems, and concerns about the solvency of pension institutions. In Denmark there is extensive use of guaranteed minimum returns in both the accumulation and payout phases which create substantial obligations on pension institutions, and focus attention on the integrity and solvency of the institutions which provide them. In conjunction with freeing up investment restrictions and moving towards market valuation of assets, the supervisor has introduced a 'traffic light' stress test model which calculates the effect of several market scenarios - the red test which is the more plausible and the yellow test which is possible but less likely. In addition to the use of the traffic light system, there has been a growing emphasis on the adequacy of internal risk control systems and greater reliance on market discipline. Pension institutions have sought to reduce their exposure to market volatility by better matching of assets and liabilities. There is a much better understanding of the risks inherent in the pension institutions' portfolios, and there has been a substantial increase in the use of hedging instruments. 2012-05-29T19:11:58Z 2012-05-29T19:11:58Z 2008-02 http://documents.worldbank.org/curated/en/2008/02/9045914/risk-based-supervision-pension-institutions-denmark http://hdl.handle.net/10986/6594 English Policy Research Working Paper; No. 4540 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Washington, DC: World Bank Publications & Research :: Policy Research Working Paper Publications & Research Denmark |