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"Report and Accounts 2001"

Organisation and Tasks of Danmarks Nationalbank

Danmarks Nationalbank's objectives and values

Danmarks Nationalbank has a number of objectives and values, which are the guidelines for its daytoday activities. Both the objectives and the values have been drawn up in close cooperation between management and employees, and they form the basis for the individual departments' work on objectives and action plans. No changes were made to the objectives and values in 2001.

Objectives
The overall objectives of Danmarks Nationalbank as an independent and credible institution are:

• To ensure a stable krone.
• To ensure efficient and secure production and distribution of banknotes and coins of high quality.
• To contribute to efficiency and stability in the 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 prepare and communicate credible standpoints on economic and financial issues with relation to Danmarks Nationalbank's objectives.
• To maintain its financial strength by means of consolidation and risk management.

Values

• While safeguarding its traditions, Danmarks Nationalbank shall actively renew itself and adapt to trends in society and to the requirements of the surrounding world. Danmarks Nationalbank shall protect its credibility by not only displaying professional competence, managerial skills and sound judgement, but also by maintaining an organisation which lives up to the principles Danmarks Nationalbank considers to be significant to society's development: efficiency, cost awareness and readiness for change. Focusing on its primary tasks, on an ongoing basis Danmarks Nationalbank shall set priorities for its work.
• Danmarks Nationalbank shall be an attractive workplace capable of attracting, motivating and retaining wellqualified employees and offering them working conditions which ensure balance between work and leisure. Key qualifications are initiative, commitment, adaptability and a willingness and ability to cooperate across professional barriers, and with other areas of the organisation. All employees must have the necessary training and/or education to handle their tasks. It is a joint responsibility to ensure that everyone is trained and developed in preparation for new tasks.
• Danmarks Nationalbank shall be serviceoriented in terms of both the external relations of line functions, and the internal relations of staff functions with the rest of the bank. Teamwork and project work within each unit and between departments is encouraged. In cooperation with the employees, managers shall set priorities for tasks, define targets and ensure the necessary responsibility sharing and communication, thereby limiting the need for detailed supervision. This gives employees the widest possible scope to define their own working methods, solve tasks and take decisions themselves to the greatest extent possible.
• Danmarks Nationalbank's relations with the financial sector are based on marketoriented solutions, and the costs to the sector and Danmarks Nationalbank must be weighed against the value to society of the system or requirement. The underlying principle for systems and requirements relating to the credit institutions shall be equal treatment irrespective of size, geographical location and national affiliation.
• In relations with public authorities and players in the financial system, and in international cooperation, Danmarks Nationalbank shall seek influence and express attitudes which are in line with Danmarks Nationalbank's objectives. In relations with the public Danmarks Nationalbank shall, via the media and otherwise, ensure an understanding of the decisions relating to Danmarks Nationalbank's own tasks. With regard to financial conditions or economic policy in general, Danmarks Nationalbank shall comment on these issues if they are of material importance to its implementation of monetary and foreignexchange policy, or to the efficiency and stability of the financial markets.

Danmarks Nationalbank's management

The Royal Bank Commissioner
The Royal Bank Commissioner is the formal link between the Government and Danmarks Nationalbank. The Minister for Economic and Business Affairs and for Nordic Cooperation Mr. Bendt Bendtsen is the Royal Bank Commissioner.

Box 9 The board of directors of Danmarks Nationalbank, 1 march 2002

Board of Directors
The Board of Directors has 25 members, of whom 8 are elected by theFolketing (Parliament) from among its members, and 2 are appointed bythe Royal Bank Commissioner. The other 15 members, who must have indepth knowledge of business conditions, are elected by the Board of Directors and should represent different geographical areas and professions, including wageearners. Meetings are normally held once in each quarter. The Board of Directors has organisational tasks and must approve the annual accounts. The Board of Directors of Danmarks Nationalbank as of 1 March 2002 is shown in Box 9. Changes in the Board of Directors are stated in the press releases on p. 131.

Box 10 The committee of directors of Danmarks Nationalbank, 1 march 2002

The Committee of Directors
The Committee of Directors has 7 members. The two members of the Board of Directors appointed by the Royal Bank Commissioner are permanent members. On the election of the other 5 members of the Committee of Directors, it is customary for the Board of Directors to elect two MPs representing the government and the opposition parties, respectively. The Committee of Directors usually meets 10 times a year. The Committee of Directors of Danmarks Nationalbank as of 1 March 2002 is shown in Box 10. Changes in the Committee of Directors are stated in the press releases on p. 131.

Board of Governors
The Board of Governors has 3 members. The governors are charged with the daytoday management of Danmarks Nationalbank and are responsible for the formulation and ongoing adjustment of monetary policy. As Governor by Royal Appointment Ms. Bodil Nyboe Andersen is Chairman of the Board of Governors. The two other members, who are appointed by the Board of Directors on the recommendation of the Committee of Directors, are Mr. Torben Nielsen and Mr. Jens Thomsen.

Auditors
The appointed external auditors of Danmarks Nationalbank are State Authorised Public Accountant Mr. Bjarne Fabienke and StateAuthorised Public Accountant Mr. Svend Ørjan Jensen.

Departments

Danmarks Nationalbank has 16 departments, cf. the organisation chart on p. 95. The tasks of the individual departments are as follows:

• Accounting manages and monitors the accounts of customers (credit institutions, the central government, central banks, etc.) and the settlement of payments in the financial sector. It undertakes settlement and bookkeeping of transactions concerning Danmarks Nationalbank's foreignexchange and bond portfolios, and the centralgovernment debt. It also undertakes Danmarks Nationalbank's payroll administration and prepares its accounts, budgets and statistical reporting.
   
• Audit undertakes the audit of Danmarks Nationalbank's accounts, procedures, IT systems and internal control, including Danmarks Nationalbank's Pension Fund and various foundations, in cooperation with the appointed external auditors. It also audits the Guarantee Fund for Depositors and Investors, the Social Pension Fund and the government debt management in cooperation with the Auditor General.
   
• Banking Services supplies banknotes to Denmark, the Faroe Islands and Greenland. This takes place via cash depots established by agreement with banks. Worn banknotes are returned to Banking Services for control of authenticity and destruction.
   
• The Banknote Printing Works manufactures Danish and Faroese banknotes, and is thus responsible for the design of the banknotes, the production of printing plates and ink, and the actual printing of the banknotes, as well as quality control, cutting out and packaging. The Banknote Printing Works also participates in international cooperation on improving the security of banknotes.
   
• Economics assesses economic development in Denmark and in the industrialised countries, and analyses monetary and foreignexchange policy issues. The economic model MONA has been developed by the department for analysis of domestic cyclical trends. Economics edits Danmarks Nationalbank's quarterly Monetary Review.
   
• Facility Services is responsible for the administration and maintenance of Danmarks Nationalbank's properties and for messengers, postal services, watchmen, cleaning and canteen services, etc.
   
• Financial Markets is responsible for evaluation and management of Danmarks Nationalbank's positions and the related market analyses. The department prepares outline strategies for the government debt management and analyses trends on the financial markets and in the Danish financial sector. It also assists in the preparation of legislation in these areas. Financial Markets publishes Government Borrowing and Debt and Financial Stability.
   
• International Relations is responsible for relations with international economicpolicy organisations, including the European Central Bank (ECB) within the European System of Central Banks (ESCB), and with the International Monetary Fund (IMF).
   
• IT is responsible for Danmarks Nationalbank's use of IT. The areas of responsibility are relations with Bankernes EDB Central (BEC), and the operation and development of the bank's local area networks, development tasks on the bank's Lotus Notes platform, operation of certain databases on the local area networks, Danmarks Nationalbank's IT strategy, project planning and followup, as well as purchasing and managing Danmarks Nationalbank's hardware and software.
   
• Market Operations undertakes the daytoday administration of Danmarks Nationalbank's foreignexchange policy and monetary and liquidity policy, including intervention in the foreignexchange and money markets. It is responsible for the administration of Danmarks Nationalbank's bond portfolio and foreignexchange reserve. On behalf of the Ministry of Finance it undertakes domestic and foreign borrowing for the central government.
   
• Payment Systems handles policy issues relating to payment systems. It cooperates with owners and operators of the Danish retail payment and settlement systems and monitors these systems. It also develops and maintains Danmarks Nationalbank's payment system for large krone and eurodenominated payments.
   
• Personnel and Organisation is responsible for personnel policy and staff development, collective agreements and other contracts, as well as personnel administration. The department also has general organisational duties such as administration of internal training.
   
• The Royal Mint manufactures Danish coins and supplies banks in Denmark, the Faroe Islands and Greenland with coins. In addition to ordinary coins in circulation, commemorative coins, coin sets and medals are also manufactured.
• Security is responsible for the bank's security, including IT security.
   
• Statistics prepares statistics for the financial sector, registers and analyses payments to and from abroad for use in the compilation of the balance of payments, and compiles Denmark's foreign debt and direct investments. Statistics edits and publishes the Nyt series and other regular statistical publications.
   
• The Secretariat undertakes general secretariat functions for the Board of Governors, the Committee of Directors and the Board of Directors and is responsible for external and internal communication, including relations with the press, and Danmarks Nationalbank's Web site, intranet and library. The Information Desk responds to general external enquiries. The Secretariat also comprises Danmarks Nationalbank's central archives. Legal Affairs handles general legal issues, including EU law. The Secretariat edits Danmarks Nationalbank's Report and Accounts.
   

Staff

Number, staff groups, seniority, age, etc.
At the close of 2001 Danmarks Nationalbank had 611 employees, equivalent to 558 fulltime positions. In 2001, 47 new employees joined the bank, and 41 left, 11 of whom retired. This is equivalent to a staff turnover rate of 6.8 per cent.

The bank has fairly equal numbers of academic staff, bank staff and IT/clerical staff, while craftsmen/technicians and service staff each account for a slightly smaller share, cf. Table 8.

Table 8 Staff groups

Note:    Number of employees converted to full-time positions.

46 per cent of the staff are women and 54 per cent men. The proportion of women in managerial positions^[42]is 17 per cent, an increase by 3 per cent on 2000. Age and gender distributions are shown in Chart 29.

Staff development
The bank attaches great importance to the ongoing professional and personal development of its staff. This is achieved through competenceenhancing tasks, as well as further and supplementary training. Another key element is annual employee appraisal interviews, while younger economists and bank staff are also subject to a compulsory scheme for rotation to the various departments of the bank. Finally, employees may also take leave to work for international financial institutions for shorter or longer periods. At the close of 2001, 18 employees were on leave in this connection.

The bank's expenditure on courses and supplementary training, which has by and large doubled during the last five years, was kr. 10.7 million in 2001, equivalent to 5 per cent of the total payroll costs. Almost half of this expenditure was for professional courses. Approximately 20 per cent was for personal development courses, and the rest for IT courses, internal seminars, etc.

Chart 29 Distribution by age and gender, year-end 2001

The bank increasingly relies on internal instructors in order to better match the supplementary training of its employees to the enhanced requirements made of the staff of central banks. The team of internal instructors to some extent also conducts personal development courses.

Danmarks Nationalbank now covers a larger share of the cost of courses outside working hours for a broader staff group than previously. These courses can typically be graduate diplomas in economics, IT administrator or computer technology courses, or language courses.

Employee survey
In 2001 Danmarks Nationalbank conducted an employee survey with focus on how staff perceive the bank's human resources policy on a daytoday basis.

The survey was carried out by an external firm of consultants. Employees gave their support to the survey with a response rate exceeding 85 per cent. Around 80 per cent of respondees expressed full or partial satisfaction with the human resources policy in practice. Although this result was positive, potential for further development was indicated within such areas as information, career opportunities, and mutual respect among the various staff groups.

Since the results of the survey were presented in June 2001, the individual departments have each worked on relevant topics, and the results of this work were available in February 2002 when the Joint Consultation Committee completed its followup on the survey.

Absence due to illness
In 2001 absence due to illness, including longterm absence, was an average of 8.3 days per employee. An effort has been made to pay more attention to absence due to illness, e.g. via interviews with employees who are absent more frequently on grounds of illness.

Salary and employment conditions
All employees of Danmarks Nationalbank – except those employed by the Banknote Printing Works and managers – are subject to a collective agreement between Danmarks Nationalbank and Danmarks Nationalbank's Staff Association. The agreement is based on the terms and conditions applying to the financial sector. The agreement was renegotiated in 2001 for a further 2year period.

As a result of the negotiations the former rules on compensation in connection with business travel have – for the period covered by the new collective agreement – been replaced by a decentralised compensation pool.

It was also agreed to set up a committee which, in time for the next renegotiation of the collective agreement in 2003, is to prepare a proposal for a new salary system for Danmarks Nationalbank and describe the advantages and drawbacks of such a system compared to the bank's present salary system.

Employees of the Banknote Printing Works are subject to a collective agreement between the bank and the Industry sector of the Union of Commercial and Clerical Employees in Denmark (HK). This agreement runs until 2004.

Representation on committees, etc.

As of 1 March 2002 the National bank is represented on the following committees, etc.:

• The Financial Business Council
  Governor Jens Thomsen is a member, and Kirsten Rohde Jensen, Head of Division is an alternate member.
   
• The Economic Council
  Governor Jens Thomsen is a member.
   
• VP A/S – The Danish Securities Centre
  Governor Torben Nielsen is Vice Chairman of the Board of Directors.
   
• Bankernes EDB Central (BEC)
  Governor Torben Nielsen is an observer on the Board of Directors.
   
• The Danish Securities Council
  Jens Lundager, Head of Division, is a member, and Suzanne Hyldahl, Assistant Head of Division, is an alternate member.
   
• The Nordic Investment Bank
  Hans Denkov, Head of Market Operations, is an alternate member of the Board of Directors.
   
• GrønlandsBANKEN A/S
  Former Governor Ole Thomasen is elected to the Board of Directors.
   
• Danish Ship Finance
  Former Governor Ole Thomasen is a member of the Board of Directors and the Board of Representatives. 
  Mr. Max Bæhring and Professor Michael Møller are members of the Board of Representatives.
   
• Managing Committee for the Social Pension Fund
  Hans Denkov, Head of Market Operations, is a member.

Representation in international organisations

As an element of the international foreignexchange and monetary policy cooperation Danmarks Nationalbank participates in a number of committees, subcommittees and working groups, of which the most significant are:

The European Union, EU

• The Economic and Financial Committee
  Governor Jens Thomsen (with Henrik Fugmann, Deputy Secretary, Ministry of Finance).
  Niels Bartholdy, Head of Division, is an alternate member of the Committee (with LiseLotte Teilmand, Head of Division, Ministry of Finance).
   
• The Economic Policy Committee
  Christian Ølgaard, Head of Division, (with Per Callesen, Deputy Secretary, and Helge Sigurd NæssSchmidt, Head of Division, Ministry of Finance, and Ulrik Nødgaard, Head of Division, Ministry of Economic and Business Affairs).
   
• The Banking Advisory Committee
  Hugo Frey Jensen, Assistant Director, (with Torben Garne, Head of Division, Ministry of Economic and Business Affairs, and Henrik BjerreNielsen, Director General, Financial Supervisory Authority).
   
• The Working Group of Mint Directors
  Laust Grove, General Manager, the Royal Mint, and Tina Winther Frandsen, Head of Section.

The European Central Bank, ECB

• The General Council
  Governor Bodil Nyboe Andersen.

Danmarks Nationalbank participates partly in the following ECB committees:

• Accounting Committee
  Henrik Larsen, Director, and Lisbeth Sundin, Assistant Head of Division.
   
• Banking Supervision Committee
  Hugo Frey Jensen, Assistant Director, (with Henrik BjerreNielsen, Director General, Financial Supervisory Authority).
   
• Banknote Committee
  Hans Kloch, Director, General Manager, and Tage Heering, Head of Division.
   
• External Communications Committee
  Bjarne Skafte, Head of Secretariat, and Winnie Jakobsen, Assistant Head of Division.
   
• Information Technology Committee
  Søren Lundsby Hansen, Head of Information Technology, and Tom Wagener, Adviser.
   
• Internal Auditors Committee
  Peter Jochimsen, Chief Auditor, and Stephan Green Löwe, Head of Section.
   
• International Relations Committee
  Governor Jens Thomsen and Kai Aaen Hansen, Director, Head of International Relations.
   
• Legal Committee
  Kirsten Rohde Jensen, Head of Division.
   
• Market Operations Committee
  Frank Nielsen, Head of Division.
   
• Monetary Policy Committee
  Anders Møller Christensen, Director.
   
• Payments Systems Committee
  Karsten Biltoft, Head of Payment Systems, and Allan Damm Christensen, Adviser.
  
• Statistics Committee
  Jørgen Ovi, Assistant Governor, Head of Statistics.

The International Monetary Fund, IMF

• Board of Governors
  Governor Bodil Nyboe Andersen is the Danish member. (Karsten Dybvad, Permanent Secretary, Ministry of Finance, is an alternate member).
   
• The Nordic/Baltic Monetary and Financial Committee
  Governor Jens Thomsen (with Henrik Fugmann, Deputy Secretary, Ministry of Finance).
  Kai Aaen Hansen, Director, Head of International Relations, is a member of the Group of Alternate Members (with Søren Vester Sørensen, Head of Section, Ministry of Finance).

Organisation for Economic Cooperation and Development, OECD

• The Economic Policy Committee
  Governor Jens Thomsen (with Michael Dithmer, Permanent Secretary, Ministry of Economic and Business Affairs, and Per Callesen, Deputy Secretary, Ministry of Finance).

Danmarks Nationalbank's anniversary foundation of 1968

The primary purposeof Damarks Nationalbank's Anniversary Foundation is to extend financial support for decorative art, architecture and design, althoughapplicationsrelatingtomusicanddancearealsotakenintoaccount. When considering applications, the Board of the Foundation lays weight on quality as well as support to new and futureoriented artistic projects.

Danmarks Nationalbank's Anniversary Foundation was established in connection with the bank's 150th anniversary in 1968, when kr. 15 million was given to the Foundation. This sum has been supplemented several times, and the total capital now amounts to kr. 60 million.

The capital is placed in bonds. As a consequence of falling interest rates in recent years, yields on the Foundation's capital have decreased and grants have therefore been reduced significantly. The Board of Directors of Danmarks Nationalbank has therefore adopted the transfer of kr. 25 million to the Foundation in connection with the allocation of profits in Danmarks Nationalbank's accounts for 2001.

On 1 March 2002 the Board of the Foundation comprised Governor Bodil Nyboe Andersen (Chairman), Professor Hans E. Zeuthen (Deputy Chairman), the Ceramist Karen Bennicke, Director Bodil Busk Laursen, Attorneyatlaw Per Magid and the Architect and Industrial Designer Teit Weylandt.

The Board meets four times a year to award grants. In 2001, 1,303 applications were considered and 156 grants totalling kr. 4.9 million were awarded.

In September 2001 the Foundation awarded two honorary grants of kr.100,000eachtotheCeramistUrsulaMunchPetersen and the Hand Bookbinder Ernst Rasmussen. In that connection an exhibition of selectedworksbythetwodecorativeartistsopenedinthe vestibule of the bank.

Danmarks Nationalbank's guest apartments at Nyhavn 18

Danmarks Nationalbank has seven guest apartments at Nyhavn 18 which are made available to foreign scientists and artists. Residence in the guest apartments is free and granted from three months up to one year. In 2001 the guest apartments at Nyhavn 18 were allocated to 11 visitors.

The committee formed to advise on the allocation of the apartments consists of Professor Ole Feldbæk (Chairman), Dr. Else Marie Bukdahl, and Professor SørenPeter Fuchs Olesen.

The Erik Hoffmeyer travel grant foundation

In 2001 the Erik Hoffmeyer Travel Grant Foundation awarded grants to MieSophia Elisabeth Augier, MSc (economics and business administration) and PhD student, and to the actor Farshad Kholghi. They each received a grant of kr. 40,000 for further studies abroad.

The Erik Hoffmeyer Travel Grant Foundation was established by the Board of Directors of Danmarks Nationalbank in 1995 as a tribute to Mr. Erik Hoffmeyer for 30 years' outstanding service as Chairman of Danmarks Nationalbank's Board of Governors. The establishment and objective of the Foundation are described in the 1995 Annual Report.

The Board of the Travel Grant Foundation comprises Professor Hans E. Zeuthen (Chairman), Former Governor Erik Hoffmeyer and Former Chief Rabbi Bent Melchior.

Footnotes

^[42] Defined as at least Assistant Head of Division.

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Version 1.0 March 2002 Nationalbanken.
Published by Danmarks Nationalbank March 2002, http://www.nationalbanken.dk/