Danmarks Nationalbank's history


When and how was Danmarks Nationalbank established?
Danmarks Nationalbank was established as a private limited liability company in 1818 with the aim of rebuilding the monetary system. The background was that the enormous government budget deficit during the Napoleonic Wars was financed by printing more money. This caused inflation to soar, requiring an extensive currency reform.

On 4 July 1818, the king signed the Danmarks Nationalbank's ”constitution” (Charter) authorising Danmarks Nationalbank to operate as a central bank and granting it a monopoly on issuing banknotes. Private ownership was to cement its independence of the state and enhance confidence that the state would not in future finance its expenditure by the issuing of money.

The shareholders were primarily Danish property owners. and they had no direct influence of Danmarks Nationalbank's governance – basically their only right was to receive dividend. The purpose was to ensure Danmarks Nationalbank's independence not only of the state, but also of narrow private shareholder interests.

The Danmarks Nationalbank Act of 7 April 1936 restructured Danmarks Nationalbank into a self-governing institution.