TITLE: Denmark's Financial Supervisory Authority Issues Enforcement Orders to Jyske Bank Following Operational Risk Inspection
BODY:
On June 29, 2026, Denmark's Financial Supervisory Authority (FSA) published an inspection report concerning the management of operational risk at Jyske Bank A/S. The FSA conducted the inspection in February 2026 to assess whether the bank's operational risk management complied with relevant policies, procedures, and requirements under the Management Order (ledelsesbekendtgørelsen).
The FSA identified significant deficiencies in the bank's operational risk governance. The bank did not follow a clear and documented methodology for systematically identifying risks, creating an elevated risk that relevant operational risks remained unidentified. Although the bank implemented a requirement in 2021 to link identified risks to specific processes or systems, this had only been completed for approximately one-third of risks. The FSA found that the bank's risk descriptions, assessments, and documentation of risk-reducing controls varied substantially in scope and quality, with insufficient documentation supporting the bank's risk evaluations and control effectiveness assessments. Additionally, the bank recorded operational loss events only to a limited extent and failed to link these events to identified risks, reducing opportunities to improve risk identification and assessment practices.
The FSA noted that while the bank maintained a reasonable operational risk policy approved by its board, the risk officer and management had failed to implement it satisfactorily over several years. Consequently, the FSA issued two enforcement orders: the bank must ensure that all group entities manage operational risks in accordance with its operational risk policy, and the risk officer must establish a sufficiently documented basis for the board's assessment of operational risks, including evaluation of whether risks are correctly identified, measured, managed, and reported. The bank had appointed a new leader for its non-financial risk management function and committed to allocating additional resources, though these were not in place at the time of inspection. The inspection did not result in changes to the bank's solvency requirements.