Danish Central Bank Warns Of “Risk Illusion”, Fears “Fire Sale” Plunge In Asset Prices

Saturday, April 2, 2016
By Paul Martin

by Tyler Durden

Having slashed rates below zero and unleashed various rounds of asset-purchases, the Riksbank (Denmark’s central bank) recently warned the rest of the world that “we have reached the limits of monetary policy.” Now, however, Denmark’s Systemic Risk Council has raised the financial system warning level to DEFCON1, warning that low levels of interest rates have led to excessive risk-taking and risk illusion among borrowers and credit institutions… and low market liquidity combijed with sudden shifts in risk perceptions may still lead to significant falls in asset prices and fire sales.

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