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The central role of Danmarks Nationalbank
The transfer of money between two banks may be as a transaction between the two banks or as a customer in one bank transferring money to a customer in the other bank.
Since Danmarks Nationalbank acts as banker to the banks, transfers from one bank to another take place via their accounts with Danmarks Nationalbank.
Types of payment systems
Denmark has a number of payment systems for handling various types of payments. The system used to settle a payment depends on the type of payment. A general distinction is made between two types of payment systems, viz. gross and net settlement systems. Net settlement systems are also called netting systems.
In netting systems, payments between banks are compiled to show how much the individual banks owe each other. A net amount is calculated for each bank, and at a fixed time the amounts are exchanged. The two largest netting systems in Denmark handle, respectively, securities trading and retail payments, via e.g. Dankort (debit card), cheques and BetalingsService (direct debit).
In both netting systems the net amounts in kroner and euro are eventually transferred, respectively, via the real-time gross settlement systems, KRONOS offerede by Danmarks Nationalbank and TARGET2 offerede by the Eurosystem for individual settlement.
Payments in euro
It is also possible to effect payments in euro, both in Denmark and to banks in the other EU member states. Payments in euro are effected via the joint European payment system, TARGET2.
Secure and efficient payment systems – oversight
To maintain confidence in payment systems and limit the risk that a problem experienced in one system or by one bank affects the other systems or banks, a number of international standards have been prepared, focusing on stability and efficiency within payment systems. Like many other central banks, Danmarks Nationalbank is responsible for assessing whether the systems meet these requirements. This task, called oversight, comprises both the bank's own KRONOS system and the two largest netting systems.
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