By Gustav Sandstrom 
 

A Danish government committee Thursday said six of the country's banks should be classified "too big to fail" and held to higher capital and liquidity standards to prevent a repeat of the 2008 financial crisis.

The banks that should be designated as systemically important financial institutions, or SIFIs, are Danske Bank A/S (DANSKE.KO), the Danish unit of Sweden's Nordea AB (NDA.SK), Nykredit A/S, Jyske Bank A/S (JYSK.KO), BRFkredit and Sydbank A/S (SYDB.KO), the SIFI Committee said.

Besides additional capital and liquidity requirements, the committee also recommends enhanced supervision of SIFIs and the development of recovery and resolution plans, corporate governance and crisis management, it said.

The panel proposed a "significant" phasing-in period for the rules, prompted by new EU legislation on capital requirements for lenders and investment firms.

Some recommendations, including the SIFI requirements, might be implemented already next year, but the introduction of a crisis management regime will have to await adoption of similar rules in the EU in order to ensure compatibility with international regulation, the committee said.

Many European banks have lobbied for regulators not to implement new SIFI rules too fast.

The committee has turned over its proposal to the Danish minister for business and growth, Annette Vilhelmsen.

"The government generally supports the recommendations from the committee," she said in a statement. "These institutions are so large that it can affect the entire financial system and the economy as a whole if they get into trouble."

Several smaller Danish banks, including Amagerbanken and Fjordbank Mors, failed in the wake of the 2008 financial crisis amid poor funding conditions and risky loans to the country's real estate and agricultural sectors.

The committee includes members from government ministries, Denmark's central bank and financial supervisory authority, and independent experts.

Political negotiations are likely to start in the months ahead, after a public consultation.

Write to Gustav Sandstrom at gustav.sandstrom@dowjones.com

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