Foreword

Danmarks Nationalbank is the central bank of Denmark. Danmarks Nationalbank was established in 1818 and has been a self-governing institution since 1936.

The legal basis for the Nationalbank's activities is the Nationalbank Act of 1936, according to which the Nationalbank's objective is "to maintain a safe and secure currency system in this country, and to facilitate and regulate the traffic in money and the extension of credit". The Maastricht Treaty stipulates that the central banks of the European Union must be independent in the performance of monetary policy. In March 1998 the European Monetary Institute reviewed the legal basis for the individual central banks. In its Convergence Report the EMI states that the Nationalbank fulfils the Treaty's requirements in this respect.

The Nationalbank's function as central bank entails a number of tasks which distinguish the Nationalbank from other banks. Within the framework of the Nationalbank Act, the Foreign-Exchange Act and the Maastricht Treaty the Nationalbank has set out objectives for these tasks.

As an independent and credible institution the Nationalbank's objectives are as follows:

• to ensure a stable krone rate
• to ensure efficient and secure production and distribution of banknotes and coins of high quality
• to contribute to efficiency and stability in payment and clearing systems and in the financial markets
• to act as banker to the central government
• to prepare reliable and relevant financial statistics
• to develop and communicate credible standpoints on economic and financial issues with relation to the bank's objectives
• to maintain its financial strength by means of consolidation and risk management.

These objectives serve as the guidelines for the Nationalbank in its day-to-day work.

The Nationalbank has around 570 employees. The Management consists of the Board of Directors, the Committee of Directors and the Board of Governors. The Board of Directors and the Committee of Directors undertake organisational tasks and approve the annual accounts. The Board of Governors is responsible for the day-to-day management of the Nationalbank and for monetary-policy decisions. The Royal Bank Commissioner is the formal link between the government and the Nationalbank.

The Report of the Board of Governors presents recent trends in the Danish economy, the monetary and foreign-exchange policy and the development in financial markets in Denmark and abroad, together with a review of international monetary cooperation as well as some of the Nationalbank's areas of operation, its organisation and accounts.

In the quarterly Monetary Reviews the Nationalbank publishes articles on recent trends in a number of areas such as monetary policy, statistics, banknotes and coins, Economic and Monetary Union, payment systems, etc.