Denmark's Systemic Risk Council said on Tuesday it still finds it appropriate to increase banks' emergency buffer, the so-called countercyclical capital buffer, to 2.5% from March 2023, as decided by the country's business minister a year ago.

"The objective of the buffer is to ensure that the institutions have a cushion that makes them more resilient if risks materialise," the council said in a statement.

"The Council is ready to recommend a reduction of the buffer rate with immediate effect if stress occurs in the financial system and there is a risk of severe tightening of credit granting to households and companies," it said.

(Reporting by Jacob Gronholt-Pedersen, editing by Anna Ringstrom)