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"Report and Accounts 1999"

 

Organisation

The introduction of the euro in 1999 led to changes in working procedures at the Nationalbank, which participates in the joint payment system, TARGET. The year was also characterised by the preparations for the rollover to the year 2000, which progressed smoothly.

At the close of 1999 the Nationalbank had 556 employees, which is a decrease by 10 from the previous year.

Changes in Tasks

TARGET
TARGET was commissioned on 4 January 1999, the first banking day after the introduction of the euro. The payment system DEBES, which is the Danish element of TARGET, was also commissioned without problems, cf. p. 78. TARGET's opening hours in 1999 were from 7 a.m. to 6 p.m. daily, except weekends, Christmas Day, New Year's Eve and New Year's Day. This made new requirements of the Nationalbank's staff deployment.

Automation of note inspection
In spring 2000 the manual quality control of the printed banknotes will become semi-automatic. The quality control takes place at two vital stages of note production – in the note-printing works and when the notes are cut out. On the cutting of notes the cutting machine is integrated with the inspection machine, which can check up to 40 notes per second.

Information
In 1999 the Nationalbank published "Monetary Policy in Denmark" (in Danish), which is a detailed presentation of Danish monetary policy. The purpose is to provide a bridge between general textbooks and reference works on monetary policy and the practical approach to monetary policy in Denmark in 1999 ^[1]. Moreover, in 1999 a brochure in Danish was prepared on the tasks of the Nationalbank so as to inform the general public of the tasks of the Nationalbank as central bank and to explain concepts such as inflation, fixed-exchange-rate policy, interest rates and exchange rates. Finally a brochure (in Danish and in English) has been published on the banknotes and coins of Denmark. It presents the current series of coins and banknotes and also describes the production process from outline to final product ^[2].

Finance for Danish Industry A/S (FIH)
In connection with structural adjustments at Finance for Danish Industry A/S (FIH) in 1998 the Nationalbank has divested its shareholding in FIH. In 1958 the Nationalbank contributed to establishing FIH, whose objective was to promote industrialisation by extending medium-term loans for industry and small trades. This lending is now in competition with other financial institutions, so the Nationalbank no longer considered it appropriate to be a joint owner. One half of the share portfolio was sold in 1998 and the rest in 1999.

Transition to the Year 2000

In the 1st half of 1999 the Nationalbank's preparations for the transition to the year 2000 were focused on sectoral testing involving the testing of settlement and clearing systems in the financial sector. The sector testing included communication lines and computer infrastructure, securities settlement and the financial clearing systems. Moreover, the Nationalbank participated in several of the ECB's tests of TARGET.

Already in 1998 the Nationalbank tested the systems used by the bank at BEC (Bankernes Edb Central). The programs developed by the Nationalbank itself were tested in 1999. In November 1999 all new systems were tested and the systems to which adjustments and additions had been made were tested once more.

Satisfactory supplier declarations were obtained for all standard systems.

Infrastructure and technical installations were tested if possible. In a number of cases supplier declarations were obtained. At the close of the 3rd quarter of 1999 all critical operational systems were ready for year 2000.

To provide for the contingency that despite the exhaustive work of testing computer systems, infrastructure and technical installations, problems might nonetheless arise, a detailed emergency plan was drawn up in the 2nd half year. All departments of the bank with critical operational tasks contributed to the Nationalbank's emergency plan. Just before the turn of the year a full backup was taken of all vital computer programs and data. The Nationalbank had prepared alternative duty rosters for the ordinary duty service and for the technical duty staff. On New Year's Day the systems were started up and tested.

At the international level BIS established an information platform, the MACS project, for exchange of year 2000 information among the financial authorities in approximately 30 countries around the world. The Nationalbank and the Danish Financial Supervisory Authority were the Danish financial authorities that participated.

At the European central bank level the Nationalbank participated in work within the ECB. This work was coordinated by the ECB's Year 2000 Coordination Committee which drew up an emergency and communication plan for the actual rollover to the year 2000. Up to the turn of the year, the central banks of the participating countries several times a day informed each other of the development on the financial markets, which was supplemented immediately after the turn of the year with information on how the individual central banks were functioning with regard to both technical installations and computer systems.

The emergency and communication plans also involved the days immediately before and after 29 February 2000.

In order to be able to handle a situation with increasing demand for cash in 1999 a number of measures were prepared to ensure an adequate supply of cash, cf. p. 67. The Nationalbank also gave extraordinary access to both purchase and sale of certificates of deposit just before and after New Year, in order to ensure stable money-market interest rates around the turn of the year, cf. p. 37.

As a consequence of the exhaustive preparations and testing the rollover to the year 2000 progressed smoothly.

The Nationalbank's Management

The Royal Bank Commissioner
The Minister of Economic Affairs and for Nordic Cooperation Ms. Marianne Jelved is the Royal Bank Commissioner.

Board of Directors
The Board of Directors re-elected Mr. Bent le Fèvre, Mr. Jens Rostrup-Nielsen and Professor Hans E. Zeuthen for a new five-year term from 1 April 1999.

Mr. Erik B. Rasmussen took his retirement on 31 March 1999. Mr. Søren Bjerre-Nielsen was elected to the Board of Directors as from 1 April 1999.

The Board of Directors re-elected Professor Hans E. Zeuthen as Chairman and Ms. Helle Bechgaard as Deputy Chairman for the period 1 April 1999 to 31 March 2000.

In April 1999 the Folketing (Parliament) elected Mr. Christian Mejdahl, MP as new member of the Board of Directors to replace Mr. Uffe Ellemann-Jensen, MP who wished to withdraw.

Mr. Jacob Buksti, MP withdrew from the Board of Directors on 23 February 2000 on his appointment as minister. The Folketing (Parliament) has not yet elected a new member.

Mr. Jørgen Estrup, MP will leave Parliament on 1 March 2000 and must therefore also withdraw from the Board of Directors. The Folketing (Parliament) has not yet elected a new member.

Mr. Harry Nicolaisen takes his retirement on 31 March 2000.

The Board of Directors of the Nationalbank is presented in Box 11.

Box 11 The Board of Directors of Danmarks Nationalbank, 1 March 2000

Committee of Directors
For the period 1 April 1999 to 31 March 2000 the Board of Directors re-elected Mr. Jacob Buksti, Ms. Margit Vognsen and Professor Hans E. Zeuthen. The Board of Directors also elected Mr. Søren Bjerre-Nielsen and Mr. Anders Fogh Rasmussen to replace Mr. Erik B. Rasmussen, who took his retirement, and Mr. Uffe Ellemann-Jensen, who wished to withdraw.

Two members of the Committee of Directors, Mr. Michael Dithmer and Mr. Karsten Olsen, are appointed by the Royal Bank Commissioner until 31 March 2001.

The Committee of Directors re-elected Professor Hans E. Zeuthen as Chairman and Mr. Michael Dithmer as Deputy Chairman for the period 1 April 1999 to 31 March 2000.

Mr. Jacob Buksti, MP withdrew from the Committee of Directors on 23 February 2000 on his appointment as minister. The Board of Directors has not yet elected a new member.

The Nationalbank's Committee of Directors is presented in Box 12.

Box 12 The Committee of Directors of Danmarks Nationalbank, 1 March 2000

Board of Governors
As Governor by Royal Appointment Ms. Bodil Nyboe Andersen is Chairman of the Board of Governors. The two other members are Mr. Torben Nielsen and Mr. Jens Thomsen.

Auditors
The Royal Bank Commissioner re-appointed State-Authorised Public Accountant Mr. Svend Ørjan Jensen and appointed State-Authorised Public Accountant Mr. Bjarne Fabienke to be the Nationalbank's external auditors for the year ending 31 March 2000. State-Authorised Public Accountant Mr. John Gath resigned as external auditor.

Organisation Chart 1 March 2000

Administration

The Nationalbank has 16 departments, including the Note Printing Works and the Royal Mint, cf. the organisation chart on p. 108. In 1999 a new department, Security, was established. Security is responsible for security at the Nationalbank, including IT security. IT security was previously part of the area of responsibility of Information Technology.

Staff
The total number of staff, converted into full-time employees, had decreased by 10 to 556 at the end of 1999, cf. Table 5.

Table 5 Number of Staff, Converted into Full-time Positions

Year-end	1995	1996	1997	1998	1999
Bank and clerical staff	311	320	318	326	341
Note Printing Works staff	83	82	82	77	73
The Royal Mint	40	29	26	16	16
Other	158	155	153	147	126
Total	592	586	579	566	556

New tasks have been added and therefore the number of bank and clerical staff has increased, while other tasks have lapsed or been rationalised, leading to a decrease in the group of other staff.

In 1999 12 employees left the bank under severance agreements.

At the close of 1999 26 employees were on leave, primarily working for international organisations, of whom 9 at the ECB.

3 employees were on leave under statutory leave schemes.

Further training of staff
The objective of the further training of the bank's staff is set out in the "Education Policy Objectives of Danmarks Nationalbank", adopted by the Joint Consultation Committee in 1996.

The principle is that both the bank and the employee have an interest in and share responsibility for the further education of the employee in step with the requirements imposed by new development on the Nationalbank. The costs of the further education of employees have risen from just below kr. 3 million in 1995 to kr. 9 million in 1999. This amount corresponds to approximately 4 per cent of wages and salaries, etc.

Most of the increase in expenditure on education has been used to develop work-related skills, primarily professional courses, trade conferences and computer-related subjects, for which expenditure in 1999 totalled approximately kr. 6 million. Moreover, in 1999 an amount of around kr. 1 million was devoted to managerial training.

In the spring of 1998 the Nationalbank like a number of other financial institutions offered all employees a home-PC scheme. By registering under this scheme and taking courses in a number of modules under the public "PC Driving Licence Scheme" employees were provided with a PC for use at home and could buy it at market price after the expiry of the 2-year period of the scheme. This scheme has been a success and approximately 90 per cent of the bank's staff have participated in the course during the past two years. The education costs totalled kr. 2.5 million distributed almost equally over the two years.

In the coming years the Nationalbank will focus more on teaching by internal instructors in order to give employees teaching experience as an element of their career development. This applies to toolbox courses, courses in personal development and in certain areas actual professional courses.

Furthermore, to a greater degree than before the Nationalbank will support further education in the employees' own time in areas which have a certain relevance, but are not necessarily directly related to the employee's current area of work.

Representation on Committees, etc.

As of 1 March 2000 the Nationalbank is represented on the following committees, etc.:

Financing institutes
The Ship Credit Fund of Denmark:
Former Governor Ole Thomasen is a member of the Board of Directors and the Board of Representatives. Mr. Max Bæhring and Mr. Hugo Andersen are members of the Board of Representatives.

The Agricultural Mortgage Bank:
Former Governor Ole Thomasen is a member of the Board of Directors and the Board of Representatives. Professor Flemming Just is appointed to the Board of Representatives.

Danish Venture Finance:
Professor Hans E. Zeuthen and Former Assistant Governor Jørn Kjær are appointed to the Board of Representatives.

GrønlandsBANKEN A/S:
Former Governor Ole Thomasen is elected to the Board of Directors.

The Nordic Investment Bank:
Hans Denkov, Head of Market Operations, is an alternate member of the Board of Directors.

Securities market institutions
The Securities Market Council:
Governor Jens Thomsen is a member and Ove Sten Jensen, Head of Division, is an alternate member.

The Danish Securities Centre:
Governor Torben Nielsen is Vice Chairman of the Board of Directors and Jesper Berg, Head of Payment Systems, is an alternate member.

Other institutions
Managing Committee for the Social Pension Fund:
Hans Denkov, Head of Market Operations, is a member.

The Economic Council:
Governor Jens Thomsen is a member.

Representation in International Organisations

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

The European Union, EU
The Economic and Financial Committee:
Governor Jens Thomsen (with Michael Dithmer, Permanent Secretary, Ministry of Economic Affairs).

Niels Bartholdy, Head of Division, is an alternate member of the Committee (with Henrik Fugmann, Deputy Secretary, Ministry of Economic Affairs).

The Economic Policy Committee:
Hugo Frey Jensen, Head of Division (with Per Bremer Rasmussen, Deputy Secretary, and Thomas Alslev Christensen, Director, Ministry of Economic Affairs, and Per Callesen, Deputy Secretary, Ministry of Finance).

The Banking Advisory Committee:
Benny Andersen, Head of Financial Markets (with Torben Garne, Director, Ministry of Economic Affairs, and Henrik Bjerre-Nielsen, Director General, Financial Supervisory Authority).

The Working Group of Mint Directors:
Laust Grove, General Manager, the Royal Mint, and Thomas Enevoldsen, Head of Section.

The European Central Bank, ECB
The General Council:
Governor Bodil Nyboe Andersen.

The Nationalbank participates partly in the following ECB committees:

Accounting Committee:
Henrik Larsen, Chief Accountant, Director, and Allan Damm Christensen, Special Consultant.

Banking Supervision Committee:
Benny Andersen, Head of Financial Markets (with Henrik Bjerre-Nielsen, Director General, Financial Supervisory Authority).

Banknote Committee:
Hans Kloch, Director, and Tage Heering, Head of Division.

External Communications Committee:
Bjarne Skafte, Head of Secretariat.

Information Technology Committee:
Søren Lundsby Hansen, Head of Information Technology, and Kristian Kjeldsen, Special Consultant.

Internal Auditors Committee:
Peter Jochimsen, Chief Auditor, and Stephan Green Löwe, Head of Section.

International Relations Committee:
Governor Jens Thomsen and Niels Bartholdy, Head of Division.

Legal Committee:
Kirsten Rohde Jensen, Head of Division, and Louise Mogensen, Head of Section.

Market Operations Committee:
Frank Nielsen, Head of Division.

Monetary Policy Committee:
Hugo Frey Jensen, Head of Division, and Hanne Lyngesen, Head of Section.

Payment Systems Committee:
Governor Torben Nielsen and Tobias Thygesen, Head of Section.

Statistics Committee:
Jørgen Ovi, Assistant Governor.

Year 2000 Coordination Committee:
John Larsen, Head of Division.

The International Monetary Fund, IMF
Governor Bodil Nyboe Andersen is the Danish member the IMF's Board of Governors. (Michael Dithmer, Permanent Secretary, Ministry of Economic Affairs, is an alternate member of the Board).

The Nordic/Baltic Monetary and Financial Committee:
Governor Jens Thomsen (with Michael Dithmer, Permanent Secretary, Ministry of Economic Affairs) and Kai Aaen Hansen, Director, who is Chairman of the Group of Alternate Members.

Consultant Ole Hollensen is member of the Group of Alternate Members (with Henrik Fugmann, Deputy Secretary, Ministry of Economic Affairs).

Organisation for Economic Cooperation and Development, OECD
The Economic Policy Committee:
Governor Jens Thomsen (with Michael Dithmer, Permanent Secretary, Ministry of Economic Affairs, and Anders Eldrup, Permanent Secretary, Ministry of Finance).

Danmarks Nationalbank's Anniversary Foundation of 1968

In 1999 the Foundation's honorary grant was awarded to Ms. Rigmor Mydtskov, photographer, and Mr. Arje Griegst, goldsmith, who each received kr. 100,000. An exhibition of the two artists' works in the lobby of the Nationalbank marked this award.

The purpose of the Anniversary Foundation is to extend financial support for the promotion and development of the artistic design and presentation of Danish products and to support other artistic areas, mainly decorative art, architecture and design, but also music and dance. In 1999 total grants amounted to kr. 5 million. Of 1,506 applications, 147 were granted. In addition 8 grants without prior application were made.

On 1 March 2000 the Board of the Foundation comprised Governor Bodil Nyboe Andersen (Chairman), Professor Hans E. Zeuthen (Deputy Chairman), Ms. Bodil Busk Laursen, Mr. Per Magid, Ms. Bente Scavenius and Mr. Teit Weylandt.

Further information on Danmarks Nationalbank's Anniversary Foundation can be found on the Nationalbank's Web site under "About Us".

The Nationalbank's Guest Apartments at Nyhavn 18

The 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 1999 the guest apartments at Nyhavn 18 were allocated to 12 visitors.

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

The Erik Hoffmeyer Travel Grant Foundation

In 1999 the Erik Hoffmeyer Travel Grant Foundation awarded grants to Ph.D. student Isil Kazan and the poet Muniam Alfaker. They each received a grant of kr. 40,000 for further studies abroad.

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.

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Footnotes

[1] The publication is available on the Nationalbank's Web site or can be purchased from Schultz Information.

[2] These brochures can be obtained from the Nationalbank's Information Desk.

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Version 1.0 April 2000 Nationalbanken.
Published by Danmarks Nationalbank April 2000, http://www.nationalbanken.dk