Organisation

Objektives
The overall objective of the government debt policy is to cover the central-government financing requirement at the lowest possible long-term borrowing costs, while taking the degree of risk into account.
Furthermore, the aim is to facilitate the central government’s access to the financial markets in the longer term and to support a well-functioning domestic financial market.

Organisation
The Minister of finance has the overall responsibility for the central-government debt policy, while Danmarks Nationalbank undertakes the day-to-day management of the debt portfolio.
The internal structure of Government Debt Management reflects international standards and recommendations. Government Debt Management is divided into front, middle and back offices with separate functions. A clear separation of functions and clear procedures reduce operational risks and facilitate internal control.

Diagram 1: Organisation

The tasks of Government Debt Management, among others, include

• Issuance of government securities to cover the central government's borrowing requirement
• Management of the assets of the four government funds included in the central-government debt
• Management of risk on the central-government debt portfolio
• Liquidity management of the central-government account
• Management of access to re-lending and government guarantees for a number of companies
• Establishment of a framework to ensure a well-functioning market for government securities, e.g. through market-making agreements with primary dealers in Danish government securities
• Advising the Ministry of Finance on issues concerning other financial risks, e.g. interest-rate risk in relation to the financing of subsidised housing
• Participation in international cooperation in the area of government debt management, including the OECD's Working Party on Government Debt Management and the Economic and Financial Committee on EU Government Bonds and Bills Markets
• Advising other government debt management offices.

Legislation
The statutory basis for central-government borrowing is set out in the " Act on the authority to raise loans on behalf of the central government" of 1993, which authorises the Minister of Finance to raise loans on behalf of the central government for a maximum amount of DKK 950 billion. This amount is the upper limit for domestic and foreign debt. In connection with current debt management, the Minister of Finance is moreover authorised to enter into swap agreements and other financial transactions.

The distribution of responsibilities between Government Debt Management and the Ministry of Finance is governed by the agreement on the division of work in the area of government debt between Danmarks Nationalbank and the Ministry of Finance.