Report and Accounts

FOREWORD 

REPORT OF THE BOARD OF GOVERNORS

SUMMARY

THE DANISH ECONOMY
International background 
Economic activity in Denmark and the balance of payments 
Credit expansion 
Wage and price development
Economic prospects 

MONETARY AND EXCHANGE-RATE POLICY
The fixed-exchange-rate policy 
The ECB's monetary policy 
The monetary policy of Danmarks Nationalbank
The money market and the short-term interest rates 
Capital flows and the foreign-exchange reserve 

FINANCIAL MARKETS 
Stock markets 
Interest rates 
Foreign-exchange markets 

THE DOMESTIC FINANCIAL SYSTEM 
The banks 
The mortgage-credit institutes 
The investment associations 
Insurance and pensions 
The bond market 
Statutory framework for the financial sector 
VB Finans, Himmerlandsbanken and C&G Banken 

BANKNOTES AND COINS 
Banknotes and coins in circulation 
Upgraded 100-krone banknote with new security features 
Counterfeit banknotes and coins 
Discoloured banknotes 
New 20-krone coin with Århus City Hall Tower 
Faroese banknote series – new 100-krone banknote 

PAYMENT SYSTEMS 
Krone payment systems
Euro payment systems
Oversight  
Developing the payments infrastructure 

INTERNATIONAL MONETARY COOPERATION 
The changeover to euro banknotes and coins
Enlargement of the EU
Amendment of the voting modalities of the Governing Council of the ECB 
The euro deliberations by Sweden and the UK 
The Stability and Growth Pact 
The International Monetary Fund, IMF 

STATISTICS 
New financial statistics 
Electronic collection and publication of statistics 
Future collection of balance-of-payments information 

ORGANISATION AND TASKS OF DANMARKS NATIONALBANK 
Danmarks Nationalbank's objectives and values 
Danmarks Nationalbank's management 
Departments
Staff
Special focus areas in 2002 
Danmarks Nationalbank's purchase of shares in VP Securities Services and PBS 
Representation on committees, etc.
Representation in international organisations 
Danmarks Nationalbank's Anniversary Foundation of 1968
Danmarks Nationalbank's guest apartments at Nyhavn 18 
The Erik Hoffmeyer Travel Grant Foundation 

REPORT ON DANMARKS NATIONALBANK'S ACCOUNTS 
Danmarks Nationalbank's management of financial risks
Presentation of Danmarks Nationalbank's accounts

ACCOUNTS 

DANMARKS NATIONALBANK'S ACCOUNTS FOR THE YEAR 2002 

APPENDIX 
Press releases
The Statutory Basis for the Financial Sector 
Rules for Danmarks Nationalbank's replacement of discoloured and damaged banknotes

APPENDIX OF TABLES

This Report is based on information available up to end-February 2003 

Charts 

Chart
  1  Growth in gross domestic product, GDP
  2  Contributions to growth 
  3  Nominal and real effective krone rates 
  4  The balance of payments
  5  Change in domestic lending by banks and mortgage-credit institutes
  6  Wage increases in Denmark and abroad 
  7  Increase in consumer prices and underlying inflation 
  8  Krone vis-à-vis euro
  9  Money-market interest rates in the euro area 
10  Lending rates of the ECB and Danmarks Nationalbank 
11  The foreign-exchange reserve and the net position of the banks and
      mortgage-credit institutes 
12  The Banks' interest rates 
13  Stock indexes in the USA, Europe and Japan 
14  European stock indexes 
15  10-year yield and stock index in the USA 
16  10-year yield spread to government bonds 
17  10-year yields in the USA, Germany, The UK and Japan
18  10-year yield spreads to Germany 
19  10-year government-bond yield and mortgage rates in Denmark 
20  Euro vis-à-vis dollar and yen 
21  US net capital flows 
22  Pound sterling, Swedish krona and Norwegian krone vis-à-vis the euro
23  Growth in lending and losses and provisions as a percentage of lending
      and guarantees 
24  Mortgage  - credit institutes' gross new lending by loan types 
25  Assets of investment associations 
26  Early redemptions of mortgage-credit bonds and bond yields 
27  Circulation of banknotes 
28  Circulation of coins 
29  Number of counterfeit banknotes found in circulation
30  Actual and perceived inflation 
31  Estimated government budgets 2002 
32  Distribution by age and gender, year-end 2002 

Tables in the text 

Table
  1  Key figures for the Danish economy 
  2  The Danish labour market 
  3  Capital flows 
  4  Budget balances of selected countries 
  5  Listed domestic krone-denominated bonds 
  6  Krone payment systems 
  7  Euro payments 
  8  Staff groups
  9  Interest-rate sensitivity of Danmarks Nationalbank
10  Foreign-exchange exposure of Danmarks Nationalbank
11  Danmarks Nationalbank's Value-at-Risk 
12  Danmarks Nationalbank's loss in a stress scenario, end-2002
13  Total credit exposure on the foreign-exchange reserve and the domestic
      securities portfolio, etc., end-2002

Boxes 

Box
  1  Balance of payments and government balances in the USA and the euro area 
  2  Monetary-policy instruments of Danmarks Nationalbank
  3  Upgraded 100-krone banknote with hologram 
  4  20-krone coin with Århus City Hall Tower 
  5  New Faroese 100-krone banknote 
  6  The European Central Bank and the eurosystem 
  7  ECB's proposal for rotation of voting rights in the governing council 
  8  Denmark's IMF representation
  9  Combatting money laundering and financing of terrorism
10  The Board of Directors of Danmarks Nationalbank, 1 March 2003
11  The Committee of Directors of Danmarks Nationalbank, 1 March 2003

Appendix of Tables 

Table
    1    Annual Accounts and monthly balance sheets of Danmarks Nationalbank
    2a  Specification of banknotes in circulation
    2b  Issue of new banknotes 
    3a  Specification of coins in circulation
    3b  Production of coins (minting)
    4    The balances of the banks and mortgage-credit institutes with
          Danmarks Nationalbank
    5    Money stock
    6    The official interest rates of Danmarks Nationalbank
    7a   The  official interest rates of the European Central Bank
    7b  Eurosystem monetary-policy operations allotted through tenders
    8    The foreign-exchange reserve
    9    Denmark's account with the International Monetary Fund
  10    Central rate and fluctuation band vis-à-vis euro in ERM II
  11    Exchange rates