News

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14-08-2018

Acquisitions increase FDI in Denmark

During the latest year, foreign investors have been involved in acquisitions of several large Danish companies. Among the latest trades was the acquisition of TDC in 2nd quarter of 2018.

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Foreign direct investment, flows
02-08-2018

Foreign Exchange and Liquidity and Monthly Balance Sheet, July 2018

​In July 2018, the foreign-exchange reserve decreased by kr. 60 million to kr. 468.1 billion.

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Press Releases
31-07-2018

Private investors own one third of the total UCITS market

By the end of June, Danish private investors held UCITS investment fund shares corresponding to kr. 338 billion, or one third of the total UCITS market value of kr. 958 billion.

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Investment funds
27-07-2018

Danish investors bought both foreign shares and bonds

Danish investors have for a rather long time increased their stock of foreign shares. Hence, in the first half of 2018 they bought foreign shares etc. for kr. 59 billion. Since the beginning of 2016, they have bought shares etc. worth kr. 232 billion.

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Portfolio investments
27-07-2018

No return on stock market in first half-year

Danish listed stocks generated a return, including dividends, of 0 per cent during the first half of 2018. Overall, stock prices have fallen by 1.8 per cent. In contrast, the stock market decline offsets by large dividends.

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Securities
26-07-2018

History of bank lending and deposit rates

Since the second half of the 19th century, the average bank deposit and lending rates have varied considerably. However, common for both rates is that they peaked in 1980 at 12 and 20 per cent, respectively. Today, the two interest rates are at a record low level at close to 0 and 3.5 per cent, respectively.

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Banking and mortgage lending, interests
26-07-2018

The foreign exchange reserve in 200 years

For 200 years, one of Danmarks Nationalbank's main objectives has been to ensure stable prices – an objective which has been fulfilled through the fixed exchange rate policy since the 1980's. Historically, the fulfilment of the objective is reflected in the composition of the foreign exchange reserve.

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Banking and mortgage lending, balances
13-07-2018

The pension sector in a historical perspective

The assets managed by Danish insurance and pension organisations are rapidly approaching 200 per cent of Denmark's gross domestic product, GDP. Over the last 40 years, pension funds have grown into a major role in the financial sector and the Danish economy. A role, that in a historical perspective has been dominated by banks and mortgage institutions.

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Financial accounts
09-07-2018

Competitors' behaviour affects the banks' credit standard

In Danmarks Nationalbank's lending survey 2nd quarter 2018, 6 out of 17 responding banks report that the behaviour of competitors has contributed to an easing of their credit standards for corporate customers.

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Lending survey
06-07-2018

Denmark's international investment position at kr. 1,239 billion

Denmark's international investment position, IIP, was kr. 1,239 billion at the end of the 1st quarter of 2018. This corresponds to 57 per cent of GDP. The IIP is the value of Danish foreign assets worth kr. 6,713 billion less the value of Danes' external liabilities of kr. 5,474 billion.

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Denmark's international investment position
05-07-2018

Why is nominal wage growth so low?

Nominal wage growth has been low since 2010, albeit with decent real wage growth in recent years. This also applies to Denmark’s most important export markets, e.g. Germany. A lower average replacement ratio for unemployment benefits and weak inflation have been contributing to low nominal wage growth in Denmark since 2013.

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Analysis
04-07-2018

Speech by Governor Lars Rohde at the 200th anniversary of Danmarks Nationalbank in 2018

Speech by Governor Lars Rohde at the 200th anniversary of Danmarks Nationalbank 4 July 2018.

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Speeches
04-07-2018

Anniversary publication: Danmarks Nationalbank 1818-2018

Danmarks Nationalbank’s 200-year history has been characterised by long periods of a robust economy, but also by dramatic episodes during which the stability of prices, payment systems and the financial sector have been jeopardised. This anniversary book provides a brief overview of Danmarks Nationalbank’s 200-year history, stressing the elements that are particularly relevant for today’s readers.

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Other Publications
04-07-2018

Anniversary booklet: Danmarks Nationalbank 200 years

Danmarks Nationalbank is the central bank of Denmark. It was established 200 year ago. In this booklet you can read more about the main objectives of Danmarks Nationalbank. Back in 1818, it was a series of dramatic events that led to the establishment of Danmarks Nationalbank. The Napoleonic wars and the galloping inflation made it imperative to secure the currency system and place the responsibility for issuing banknotes with an independent institution. Today, Danmarks Nationalbank's tasks are mainly to ensure trust in the systems that enable the transfer of money between people. It is to oversee the stability of the financial sector and ensure stable prices via the fixed exchange rate policy. With the ultimate objective of ensuring a robust Danish economy.

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Other Publications
03-07-2018

Foreign Exchange and Liquidity and Monthly Balance Sheet, June 2018

​In June 2018, the foreign-exchange reserve decreased by kr. 3 million to kr. 468.1 billion.

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Press Releases
02-07-2018

Low interest rates boost bank deposits

Citizens' bank deposits have increased substantially since 2011, currently accounting for 60 per cent of GDP. This is a natural development in view of the growth of the Danish economy and the narrower spread between bond yields and bank deposit rates. This means that citizens suffer a small interest rate loss only by holding deposits with banks at low or zero interest rates rather than holding bonds.

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Analysis
29-06-2018

Refinancing needs significantly reduced

Mortgage bonds totaling kr. 562 billion will be refinanced in 2018. This is a significant decline since 2013, where bonds worth kr. 1,029 billion were refinanced. The recurring refinancing needs arise from the popular adjustable-rate mortgages and mortgages covering loans with reference rates.

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Securities
29-06-2018

Danish investors sold German government bonds in May

In May 2018, Danish investors sold German government bonds worth kr. 15.5 billion, while they bought government bonds from other euro area countries totalling kr. 6.9 billion. They bought other bonds from euro area countries worth kr. 0.7 billion.

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Portfolio investments
28-06-2018

Business deposits for kr. 450 billion get negative interest

Deposits with negative interest have become common among Danish banks and for many of their financial and non-financial business customers. In April 2018, deposits with negative interest rates amounted to kr. 450 billion.

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Banking and mortgage lending, balances
28-06-2018

Record low interest rates on private customers' deposits

The average interest rate on ordinary bank deposits from Danish private customers is now 0.08 per cent – the lowest rate ever. Ordinary deposits characterise deposits which can be withdrawn without notice or used as a means of payment.

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Banking and mortgage lending, interests
27-06-2018

Capital requirements for banks - myths and facts

Capital requirements increase the banks' ability to absorb losses, thereby contributing to the robustness of the banking system. The first part of the analysis looks at the significance of equity capital to banks' weighted funding costs and their ability to meet increased capital requirements. The second part of the analysis describes three new requirements for the banks' composition of liabilities: the countercyclical capital buffer, the minimum requirement for own funds and eligible liabilities, and the completion of Basel III.

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Analysis
27-06-2018

Increasing equity by one krone does not cost one krone

The banks should have larger buffers so that they are more resilient in an economic crisis, which typically leads to losses on lending. That is why the banks have been met by stricter capital requirements since the financial crisis. From time to time it has been indicated that higher capital requirements will cost the banks an equivalent sum. That is not correct, Danmarks Nationalbank points out.

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News
21-06-2018

Danmarks Nationalbank hosts exhibition about its first 200 years

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Press Releases
21-06-2018

PhD Thesis: Essays on Debt and Pensions

The dissertation constitutes three empirical studies on how household savings behaviour is affected by pension and mortgage systems. Specifically, the thesis investigates the effects of tax incentives for saving in retirement accounts, housing wealth effects on home equity extraction, and early withdrawals from pension schemes.

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PhD Theses
19-06-2018

Central government borrowing strategy in the 2nd half of 2018

The targets for sales of government bonds and the outstanding volume of T-bills are maintained at kr. 65 billion and kr. 30 billion, respectively, in the 2nd half of 2018. The expected average sale of government bonds per auction is around kr. 2.5 billion at market value. The on-the-run issues will remain unchanged and focus will be on issuance in the 2-year and 10-year nominal bonds.

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Government Debt
07-06-2018

Speech by Governor Lars Rohde at the VL Summit 7 June 2018

Speech by Governor Lars Rohde at the VL Summit, 7 June 2018.

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Speeches
04-06-2018

Foreign Exchange and Liquidity and Monthly Balance Sheet, May 2018

​In May 2018, the foreign-exchange reserve increased by kr. 0.7 billion to kr. 468.1 billion.

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Press Releases
01-06-2018

Payment app tech triggers drop in Danish e-commerce

Use of Danish payment cards in Denmark decreased by 0.1 per cent in the 1st quarter of 2018 compared to the 1st quarter of 2017. Behind this modest decrease is a sharp 20 per cent drop in the point of use category e-commerce, etc. A drop caused by technical changes in the processing of transactions through the Danish payment app MobilePay. However, nothing indicates a real drop in Danish e-commerce.

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Payments
31-05-2018

Lengthy period of increasing risk appetite in parts of the banking sector

The times are good for the financial sector and the risk appetite is high. Credit standards are under pressure and have been eased for quite a while. Especially the medium-sized banks have been easing credit standards and have started gaining market shares. It is essential that the competitive pressure does not ultimately affect the risk appetite of the banking system overall. This development underscores the importance of having well-capitalised banks and of building up the countercyclical capital buffer so that the institutions have funds to mitigate the effects when the economy reverses.

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Analysis
31-05-2018

Danmarks Nationalbank's comments on the Danish Economic Council's discussion paper, spring 2018

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Statements
31-05-2018

Private investors count on large foreign companies

Since the beginning of 2017, Danish private investors have directly invested in selected foreign shares worth kr. 6 billion. Their ten largest investments in foreign companies amounted to almost half of their total investments.

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Portfolio investments
31-05-2018

Large dividend payments to banks' shareholders

Danish listed banks have paid out kr. 11.5 billion in dividends in the first four months of the year. This is more or less the same as for the corresponding period last year. The dividends relate to the financial year 2017 and are typically paid out in relation to the general assemblies in March and April 2018.

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Securities
31-05-2018

Strong pressure on banks' credit standards

The favourable developments in the financial sector continue, and the banks have significant capacity to increase lending. Combined with limited growth in demand for loans, this has intensified the banks’ competition for customers. This means that there is a basis for the banks to lower their credit quality and ease credit conditions.

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News
31-05-2018

Increasing risk appetite in parts of the banking sector

​The medium-sized banks have been easing credit standards for corporate customers for quite a while, and lending growth is high in some medium-sized banks. That is the conclusion in Danmarks Nationalbank's Financial Stability analysis.

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Press Releases
31-05-2018

The largest banks are close to buffer requirements in stress test

Danmarks Nationalbank's semiannual stress test of the banking sector shows that the largest banks generally satisfy their buffer requirements in a severe recession scenario. The mortgage banking sector is for the first time included in the stress test, which now focuses on the banks' capital adequacy at the group level.

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Analysis
30-05-2018

A year and a half with unchanged administration fees

The administration fee on Danes' mortgage loans was, on average, 0.88 per cent in April 2018. It is slightly lower than when it peaked in October 2016, where the latest changes in the fees had an impact. The minor decrease since October 2016 has happened as more Danes have chosen loans with fixed interest rates and / or instalments.

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Banking and mortgage lending, interests
30-05-2018

Danes now have kr. 870 billion deposited in banks

The bank deposits placed by Danish private customers continue to increase. In March and April alone deposits increased by kr. 22 billion, among other things due to large pay-outs from dividends, excess tax, and holiday pay.

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Banking and mortgage lending, balances
18-05-2018

Working Paper: Can Central Banks Boost Corporate Investment: Evidence from the ECB Liquidity Injections

Can monetary stimulus boost corporate investment? We answer this question by studying ECB's 2011-2012 Longer-Term Refinancing Operations (LTROs). While we find that the LTROs helped to decelerate the declined in Eurozone firms' investment our results also show that banks' use of LTRO funds is negatively associated with their clients' investment. Overall, the paper highlights the difficulty of boosting investment by injecting liquidity into the banking system.

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Working paper
16-05-2018

Sale of Nets increases FDI in Denmark

In the 1st quarter of 2018 the sale of Nets to foreign investors accounted for kr. 19.9 billion of the total foreign equity investments in Denmark at kr. 20.3 billion. While the investments increased the inward investments, foreign investors' reduction of intercompany loans was a drag amounting to kr. 17.0 billion. Overall foreign direct investments, FDI, in Denmark amounted to kr. 3.3 billion.

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Foreign direct investment, flows
09-05-2018

Assessment of the Danish retail payment systems

Danmarks Nationalbank oversees payment and settlement systems in Denmark in order to promote a safe and efficient financial infrastructure. Danmarks Nationalbank has performed an assessment of whether the Danish retail payment systems observe international standards for payment systems. The assessment shows that the systems extensively observe the security and efficiency requirements. Nevertheless, Danmarks Nationalbank recommends improvements in a number of areas.

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Report
03-05-2018

Governor Lars Rohde's statement regarding the Danish FSA's decision concerning Danske Bank's management and control in the Estonian money laundering case

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Statements
02-05-2018

Foreign Exchange and Liquidity and Monthly Balance Sheet, April 2018

​In April 2018, the foreign-exchange reserve increased by kr. 0.6 billion to kr. 467.5 billion.

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Press Releases
01-05-2018

Small decline in foreign ownership of Danish government securities

Foreign investors owned 38 per cent of Danish government securities in March 2018. It is a decrease compared to February where the ownership share was 42 per cent. Over a longer period of time, foreign investors' ownership share of Danish government securities has been stable around 40 per cent.

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Portfolio investments
01-05-2018

Large share repurchases among listed companies

Share repurchase programmes are popular among large listed companies as means of distributing income to investors. Danish companies have repurchased shares worth kr. 42.6 billion since last year's annual general meetings in March and April. Over the past ten years kr. 260.1 billion have been returned to investors in share repurchases.

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Securities
30-04-2018

Oversight of the financial infrastructure

This report presents the conclusions of Danmarks Nationalbank's oversight in 2017 of the core payment and settlement systems in Denmark and the most important payment solutions. The core systems and solutions extensively comply with international standards for efficiency and security, though there is still room for improvement. Cyber risks and risks arising from interdependencies remain a focus of Danmarks Nationalbank's oversight. Not all systems have made the same headway in the work regarding cyber security. This work is also carried out at sector level.

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Report
30-04-2018

Housing loans have never been cheaper

The average interest rate incl. administration fees on Danish housing loans declined to 2.19 per cent in March 2018. This is the lowest level ever recorded. Housing loans comprise credit from mortgage institutions and banks, primarily collateralized by real estate.

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Banking and mortgage lending, interests
30-04-2018

Fixed-rate loans are gaining ground

Danes' have moved further towards of fixed rate loans. In all 98 municipalities, the proportion of mortgage loans with fixed rate has increased in the recent year. The movement towards fixed rate has been most significant outside the larger cities.

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Banking and mortgage lending, balances
10-04-2018

Tighter credit standards for housing loans

Almost half of the credit institutions in the lending survey report tightening of credit standards for private customers in the 1st quarter of 2018.

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Lending survey
05-04-2018

Speech by Governor Lars Rohde at Finance and Consulting Club Aarhus

Speech by Governor Lars Rohde at Finance and Consulting Club Aarhus, 4 April 2018.

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Speeches
04-04-2018

Foreign Exchange and Liquidity and Monthly Balance Sheet, March 2018

​In March 2018, the foreign-exchange reserve decreased by kr. 80 million to kr. 466.9 billion.

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Press Releases
03-04-2018

Increased interest rate sensitivity in the mortgage market

By the end of February, an interest rate increase of 1 per cent would result in an estimated depreciation of kr. 60 billion in the market of fixed mortgage bonds with an embedded option. This was the highest interest rate sensitivity in over two years.

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Securities
28-03-2018

Market fluctuations had large impact on the IIP in 2017

Denmark's international investment position, IIP, rose by kr. 31 billion in 2017 to kr. 1,169 billion. The balance of payments surplus of kr. 165 billion added to the IIP while negative value adjustments of kr. 134 billion exerted a drag.

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Denmark's international investment position
28-03-2018

Households' average financial net wealth is kr. 1.4 million

Danish households' financial net wealth – the difference between financial assets and liabilities – reached kr. 3,750 billion by the end of 2017. This corresponds to approximately kr. 1.4 million per household, which includes both sole proprietors and employees etc.

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Financial accounts
14-03-2018

The Danish economy is well prepared for a boom

The Danish economy is well prepared for the boom that it is now entering. The economy may continue to expand without any imbalances, but experience also shows that it can overheat suddenly and violently.

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News
14-03-2018

Outlook for the Danish economy - Moderate boom in the coming years

The upswing continued in the 2nd half of 2017 and the Danish economy has entered a boom phase with mounting pressures on the labour market. The expansion has been balanced so far, partly supported by previous reforms that have increased the supply of labour. Growth in GDP is forecast at 1.9 per cent this year and slightly less in the next two years. The economy is well prepared for the boom, which may develop without the build-up of imbalances, but experience shows that the economy can overheat suddenly and violently. The government should be prepared to introduce preventive fiscal tightening with a view to dampening growth in demand if there are signs of overheating.

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Analysis
14-03-2018

Monetary and financial trends – March 2018

The Danish krone has been stable, on the strong side of the central rate vis-à-vis the euro. Danmarks Nationalbank has not intervened in the foreign exchange market in the past eleven months up to the end of February. Government bond yields in Denmark increased towards the end of 2017 and at the beginning of 2018. Companies and households increased their borrowing at a stable, but subdued, rate.

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Report
14-03-2018

Annual report 2017

Danmarks Nationalbank's accounts for 2017 show a loss of kr. 254 million, compared with a profit of kr. 3,928 million in 2016. Much of the loss is attributable to the fact that a large part of the foreign exchange reserve earns negative interest.

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Report
14-03-2018

Danmarks Nationalbank's annual report and Committee of Directors

​Danmarks Nationalbank's accounts for 2017 show a loss of kr. 254 million, compared with a profit of kr. 3,928 million in 2016.

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Press Releases
14-03-2018

Moderate boom in the Danish economy - mounting labour market pressures

​The upswing continued in the 2nd half of 2017 and the Danish economy has now entered a boom phase. Labour market pressures have increased, but so far the upswing has been balanced.

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Press Releases
02-03-2018

Foreign Exchange and Liquidity and Monthly Balance Sheet, February 2018

​In February 2018, the foreign-exchange reserve increased by kr. 3.1 billion to kr. 467.0 billion.

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Press Releases
01-03-2018

Speech by Governor Lars Rohde at the National Asset-Liability Management Europe conference

Speech by Governor Lars Rohde at the National Asset-Liability Management Europe conference, 1 March 2018.

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Speeches
01-03-2018

Danes adopt contactless payments

New technology embedded in payment cards is rapidly becoming popular. In the 4th quarter of 2017, the share of contactless card payments in shops and self-service checkouts was 44 per cent. In comparison, this share was merely 4 per cent in the 1st quarter of 2016.

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Payments
28-02-2018

Institutional investors assign more weight to foreign portfolio equity

Danish institutional investors – pension, insurance and investment funds – have purchased foreign portfolio equity and investment fund shares for kr. 168 billion since the beginning of 2016.

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Portfolio investments
28-02-2018

More mortgage loans are financed by 2 per cent bonds

Fixed rate, convertible mortgage bonds have gained ground over the recent years and the low interest rate level has made bonds with at low coupon rate more popular.

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Securities
21-02-2018

The new supplier of Danish banknotes has been chosen

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Press Releases
20-02-2018

Comments on the draft delegated act amending the commission delegated regulation on the Liquidity Coverage Ratio (LCR)

The European Commission has asked for comments on the proposed amendments to the short-term liquidity rules for EU banks known as Liquidity Coverage Ratio, LCR. Danmarks Nationalbank supports the amendments which solve the unwind problem for repos with central banks in a systemic crisis. Danmarks Nationalbank is still concerned about the framework for secured transactions, which can have some unintended consequences. Danmarks Nationalbank encourages the Commission to continue the work towards a general solution of the unwind problem for secured transactions.

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Consultation Response
19-02-2018

Working Paper: Corporate debt maturity and investment over the business cycle

In this paper I study the business cycle dynamics of the maturity structure of the debt of U.S. non-financial firms. To account for the documented facts, I construct a quantitative dynamic equilibrium model in which firms optimally choose their debt maturity structure. The model can match stylized facts about the level and dynamics of the maturity structure of debt, both in the aggregate and along the firm size distribution.

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Working paper
15-02-2018

Currency hedging of US dollars used for the purchase of new fighter aircrafts completed

​Shortly after the turn of the year, Danmarks Nationalbank began to hedge payments for the Danish Defense totalling 3.7 billion US dollars in connection with the purchase of 27 new fighter aircrafts. The hedging is now completed.

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Press Releases
14-02-2018

Danish companies continue to invest abroad

In 2017 Danish companies' foreign direct investments, FDI, abroad amounted to kr. 46 billion. Danish outward FDI has now increased for thirteen consecutive years.

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Foreign direct investment, flows
08-02-2018

Danmarks Nationalbank and the financial sector are strengthening their cyber defences

​Danmarks Nationalbank wishes to increase cyber resilience in the most critical part of the Danish financial infrastructure in particular. Consequently, Danmarks Nationalbank and the financial sector have agreed to establish a Danish red team test programme.

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Press Releases
07-02-2018

Globalisation complicates current account interpretation

The analysis examines how globalisation can affect Denmark's current account. Globalisation implies that goods sold abroad by Danish firms to an increasing extent are completely or partially produced abroad. This complicates the interpretation of the developments in imports, exports, investment income and GDP, because they can be affected by the location of firms' head office and internal accounting structure.

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Analysis
02-02-2018

Foreign Exchange and Liquidity and Monthly Balance Sheet, January 2018

​In January 2018, the foreign-exchange reserve increased by kr. 2.1 billion to kr. 463.9 billion.

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Press Releases
31-01-2018

Danish government borrowing and debt 2017

Denmark's central government debt was 21 per cent of GDP at the end of 2017. This is a decrease from 2016, attributable to a government budget surplus. In 2017, on average, the central government issued bonds at a yield to maturity of 0.2 per cent and a maturity of 7.5 years. Interest costs for the central government debt totalled 0.8 per cent of GDP. The yield spread to Germany narrowed, and liquidity improved further in the market for Danish government bonds in 2017, where the central government introduced a new primary dealer model.

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Government Debt
31-01-2018

Danish investment funds earn their highest return on Danish stocks

Investment funds, targeted towards both house-holds and institutional investors, received a return of 17 per cent from holding Danish stocks in 2017.

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Investment funds
29-01-2018

Households gain their largest return from stocks

In 2017, Danish households' investments in Danish listed stocks generated a combined return of kr. 51 billion from dividends and price gains.

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Securities
29-01-2018

Largest purchase of foreign portfolio equity since 2006

In 2017, Danish investors bought foreign portfolio shares for kr. 129 billion. This marks the largest yearly purchase of foreign portfolio equity since 2006.

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Portfolio investments
19-01-2018

Opening of 0.1 per cent inflation-linked bullet loan 2030

On 7 February 2018, 0.1 per cent inflation-linked bullet loan 2030 (ISIN: DK0009923724) will be opened. The government bond will be linked to the Danish consumer price index, CPI. The interest payment date will be 15 November and the bond will be repaid on 15 November 2030. The new bond will replace 0.1 per cent inflation-linked bullet loan 2023 as key on-the-run issue. After this the central government can conduct buy-backs in 0.1 per cent inflation-linked bullet loan 2023.

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Government Debt
09-01-2018

Fewer losses on bank and mortgage loans

11 of 23 credit institutions report decreasing impairment charges on corporate customer loans in the 4th quarter of 2017, compared to the preceding quarter. Only 3 respondents experience increasing write-offs. This corresponds to a net figure of -11 (on a scale from -100 to 100) when weighing each answer with the credit institutions' respective market share – indicating a small overall reduction in credit loss on outstanding loans.

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Lending survey
08-01-2018

Prosperity growth facing demographic headwinds

The analysis contributes to the discussion of how high economic growth rates we can expect to see in the future. The analysis shows that on the domestic front the rising average life expectancy in the coming years will curb prosperity growth. However, this development can be countered by reforms which increase labour supply. We conclude that Denmark is well-prepared for the economic challenges entailed by an ageing population because Denmark has built up considerable net foreign assets and the public finances are sustainable.

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Analysis
05-01-2018

Foreign investors own 26 per cent of Danish mortgage bonds

In November 2017, foreign investors bought Danish mortgage bonds for kr. 3.0 billion. Thus the total foreign ownership of Danish mortgage bonds reached kr. 685 billion, equivalent to an ownership share of 26 per cent of the total outstanding amount.

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Portfolio investments
05-01-2018

The value of Danish listed equities is on a high level

The value of Danish listed equities was kr. 2,631 billion by end November 2017. In comparison, this is approximately the same size as the Danish mortgage market.

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Securities
03-01-2018

Foreign Exchange and Liquidity and Monthly Balance Sheet, December 2017

​In December 2017, the foreign-exchange reserve increased by kr. 4.2 billion to kr. 468.4 billion.

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Press Releases
22-12-2017

Working Paper: Fiscal tools at the zero lower bound

The paper analyses the effectiveness of fiscal tools at the zero lower bound (ZLB) in a non-linear New Keynesian DSGE model. Although the government spending multiplier increases at the ZLB, its size depends strongly on rational expectations to the liquidity trap length. In light of this finding, market expectations in the beginning of 2009 might indicate that expectations to the American Recovery and Reinvestment Act were too optimistic.

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Working paper
22-12-2017

Denmark's IIP rose slightly in 3rd quarter 2017

Denmark's international investment position, IIP, i.e. Denmark's external assets subtracted liabilities, was kr. 1,119 billion at the end of the 3rd quarter of 2017.

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Denmark's international investment position
22-12-2017

Mortgage lending growth in 78 municipalities

Over the last 12 months, households' mortgage loans have increased in 78 of Denmark's 98 municipalities. The biggest increase – both in relative and absolute terms – has not surprisingly taken place in Copenhagen. Here, mortgage loans have increased by 10.7 per cent, corresponding to approximately kr. 12 billion.

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Banking and mortgage lending, balances
15-12-2017

Speech by Governor Per Callesen at the conference Investment and Investment Finance in Denmark

Speech by Governor Per Callesen at a panel discussion at the Danish FSA's conference "Investment and Investment Finance in Denmark", 15 December 2017.

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Speeches
15-12-2017

Central bank digital currency would not result in better payment solutions

The potential benefits of introducing central bank digital currency in Denmark would not match the considerable challenges resulting from such a decision. Danmarks Nationalbank therefore has no plans to introduce central bank digital currency.

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News
15-12-2017

Central bank digital currency in Denmark?

The analysis concludes that central bank digital currency would not be an improvement of the existing payment solutions in Denmark. Central bank digital currency would fundamentally change Danmarks Nationalbank’s role in the financial system and make it a direct competitor to the commercial banks. The introduction would also lead to risks of financial instability. The potential benefits of introducing central bank digital currency for households and businesses in Denmark would not match the considerable challenges which this introduction would present. Danmarks Nationalbank therefore has no plans to issue central bank digital currency.

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Analysis
15-12-2017

Working Paper: A cost-benefit analysis of capital requirements for the Danish economy

We analyze the costs and benefits of increasing capital requirements for Danish banks. Costs are low if banks suspend dividend payments for two years and if investors' required return falls as banks accumulate new capital. An increase of required capital ratio from its current level reduces the probability of financial crises and the long-lasting output costs associated with these. Based on Danish data and using models for the Danish economy, we thus confirm findings in studies for other economies: The benefits outweigh the social costs of increasing capital ratios.

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Working paper
14-12-2017

Danish Government Debt Policy, Strategy 2018

The target for sales of domestic government bonds and T-bills in 2018 is kr. 65 billion and kr. 30 billion, respectively. This is unchanged from 2017. In 2018, a new index-linked bond will be opened, maturing in 2030. The focus will be on issuance in the existing 2-year and 10-year nominal bonds and in the new index-linked bond.

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Government Debt
14-12-2017

New primary dealer model continues in 2018

The central government's primary dealer model with enhanced requirements and payments has strengthened the market for Danish government securities. That is the background for maintaining the model with payments in 2018. The model has contributed to a more liquid market for government securities and hence to lower financing costs for the central government. Liquidity has been increased through narrower bid-ask spreads and a higher number of banks actively trading Danish government securities.

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Government Debt
12-12-2017

Danish households opt out of cash payments

Danes prefer digital payment solutions to cash. Digital payment solutions are chosen by the youngest Danes in particular, and many young Danes carry little or no cash. Thus, many Danes live more or less without using cash, and even more Danes are expected to live without using cash in the future. However, Denmark is not heading for a cashless society. Citizens who wish to hold cash will still have the option to do so in the future.

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Analysis
07-12-2017

Speech by Governor Lars Rohde at the annual meeting of Finance Denmark 2017

Speech by Governor Lars Rohde at the annual meeting of Finance Denmark 4 December 2017.

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Speeches
06-12-2017

Working Paper: The information content in contingent convertible bond prices

Credit institutions are to an increasing extent using Contingent Convertible Bonds, CoCos, to meet part of their capital requirements. This paper provides a thorough introduction to CoCos – the product, its use in capital regulation, the market and the specific risks faced by investors. A variety of models illustrate how the complexity of CoCos makes them difficult to use when assessing the soundness of the issuer; in addition to this, the many CoCo specific risks make it questionable whether the cost of CoCos constitutes a lower bound for the cost of equity.

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Working paper
04-12-2017

Foreign Exchange and Liquidity and Monthly Balance Sheet, November 2017

​In November 2017, the foreign-exchange reserve decreased by kr. 114 million to kr. 464.2 billion.

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Press Releases
29-11-2017

Statement of Commitment to Foreign Exchange Global Code of Conduct

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Press Releases
29-11-2017

Several banks are stepping on the accelerator

The profits of banks and mortgage banks are increasing. This has contributed to a boost in optimism in the financial sector and an increase in the institutions' risk appetite, which is reflected in easing of credit standards. Several credit institutions have increased lending to cyclical industries. The aggregate trend in bank lending in combination with other factors indicates that the risks are building up in the financial system. Danmarks Nationalbank assesses that the conditions for activating the countercyclical capital buffer are in place.

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News
29-11-2017

Risks are building up in the financial sector

There is a sentiment of optimism in the financial sector. Profits of the credit institutions are rising, and a considerable lending capacity has been built up. This increases credit institutions’ risk appetite, which is reflected in easing of credit standards. Several credit institutions are increasing lending to cyclical industries and to vulnerable households with high debt ratios. At the same time, rising house prices mean that credit growth may take off suddenly.

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Analysis
29-11-2017

A few banks have capital shortfall in severe recession scenario

Danmarks Nationalbank's semiannual stress test of the banking sector shows that the largest banks are close to, and in some cases tap into, their buffer requirements in a severe recession scenario. The stress test focuses on market risk and the losses banks suffer due to falling stock prices, changes in interest rates and increasing credit spreads.

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Analysis
29-11-2017

Risks are building up in the financial sector

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Press Releases
28-11-2017

The pension sector holds a stable share in foreign portfolio investments

The Danish insurance and pension sector has placed kr. 1,779 billion in foreign portfolio investments by the end of October 2017.

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Portfolio investments
28-11-2017

By end-2017 interest rates of loans for kr. 1,157 billion will have been reset

During 2017 interest rates of mortgage loans for kr. 1,157 billion will be reset. The loans in question are loans with reference rate for kr. 698 billion and adjustable-rate loans for kr. 460 billion.

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Securities
27-11-2017

Households continue to move away from F1 and F2 mortgage type loans

Danish households continue to choose mortgage loans with a fixed interest rate instead of variable-rate loans. Over the last three years, the outstanding amount of variable-rate mortgage loans has been reduced by 7 per cent.

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Banking and mortgage lending, balances
27-11-2017

Private depositors continue to avoid negative interest rates

Private depositors continue to avoid negative interest rates on deposits in Danish commercial banks. In comparison, 53 per cent of bank deposits placed by non-financial corporations and 94 per cent of deposits from insurance and pension funds accrue negative interests. These distributions are some of the results from a semi-annual survey conducted by Danmarks Nationalbank, which as of September covered 94 per cent of all deposits in Danish banks, excluding pooling schemes.

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Banking and mortgage lending, interests
21-11-2017

Speech by Governor Lars Rohde at Nordic Cyber Conference

Speech by Governor Lars Rohde at Nordic Cyber Conference in Copenhagen, 21 November 2017.

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Speeches
21-11-2017

Nordic cyber conference aims to ensure knowledge sharing

​Cyberattacks can threaten the stability of the financial system, so the fight against cybercrime is a pivotal task for Danmarks Nationalbank. Danmarks Nationalbank, in collaboration with the other Nordic central banks, increases its focus on the critical financial infrastructure with a new yearly cyber conference – held for the first time on 21 November.

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Press Releases
20-11-2017

Recommendation for handling failing SIFI groups

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Recommendation
20-11-2017

Recommendation for resolution plans for systemically important financial groups

​In a recommendation, Danmarks Nationalbank states that principles for resolution of SIFIs must be laid down by applying a single point of entry, SPE, strategy for SIFI groups.

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Press Releases
16-11-2017

Denmark's large surplus is temporary

Denmark has had a current account surplus for almost 27 consecutive years. In recent years, the high current account surplus reflects consolidation among households and firms in the wake of the financial crisis. As concluded by Danmarks Nationalbank in an analysis, a part of the extraordinarily high surplus is assessed to be temporary.

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News
16-11-2017

Extraordinarily high current account surplus is temporary

It appears from the analysis that the very high current account surplus is temporary. The surplus has been extraordinarily high since 2010 – also in comparison to the current business cycle. Corporations' net lending rose sharply in the wake of the financial crisis. Today the surplus mainly reflects high household savings. They save in order to reduce their debt. As consumption and investment increase, the current account surplus will be reduced.

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Analysis
16-11-2017

PhD Resident Student Program

Danmarks Nationalbank offers several fellowships to support students enrolled in a Ph.D. program. Resident students are hosted at Danmarks Nationalbank for the duration of their Ph.D. program and collaborate with economists on research projects. Visiting students join the Research Unit for shorter periods and are expected to be at an advanced stage in the completion of their Ph.D. thesis.

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Career
16-11-2017

PhD Short-term Visiting Student Program

Danmarks Nationalbank invites applications for PhD students wishing to be hosted by the Research Unit and currently conducting their research in one of the areas of interest to the bank within Economics or Finance. The fellowships offer support for 6 to 12 months.

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Career
15-11-2017

Speech by Governor Lars Rohde at Central Bank Communications Conference

Speech by Governor Lars Rohde at Central Bank Communications Conference at ECB, 15 November 2017.

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Speeches
15-11-2017

Banks from more than 100 countries send payments via Kronos

The analysis describes how banks from all over the world safely and efficiently send Danish krone payments to each other via Danmarks Nationalbank's payment system, Kronos. Most Danish banks have an account at Danmarks Nationalbank and participate directly in Kronos, while many foreign banks participate indirectly through an account holder. It is important that the individual bank considers the risks that both direct and indirect participation entails.

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Analysis
14-11-2017

Danish outward FDI decreased in 3rd quarter

Danish outward FDI decreased by kr. 9.4 billion in 3rd quarter 2017. Equity investments were reduced by kr. 11.6 billion, whereas intercompany debt and trade credits rose by kr. 2.2 billion.

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Foreign direct investment, flows
06-11-2017

Speech by Governor Lars Rohde at Aarhus Symposium

Speech by Governor Lars Rohde at Aarhus Symposium, 3 November 2017.

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Speeches
02-11-2017

Foreign Exchange and Liquidity and Monthly Balance Sheet, October 2017

​In October 2017, the foreign-exchange reserve decreased by kr. 24 million to kr. 464.3 billion.

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Press Releases
02-11-2017

Working Paper The Global FDI Network: Searching for Ultimate Investors

This paper addresses three types of geographical decoupling in foreign direct investment (FDI), i.e., challenges when using traditional FDI data as a proxy for real economic integration between economies: (i) large bilateral asymmetries between inward and outward FDI, (ii) the role of special purpose entities (SPEs), and (iii) the effect of moving from immediate counterpart economy to ultimate investing economy (UIE). A unique global FDI network is estimated, where SPEs are removed and FDI positions are broken down by the UIE.

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Working paper
31-10-2017

Speech by Governor Lars Rohde at European Economics and Financial Centre Seminar

Speech by Governor Lars Rohde at European Economics and Financial Centre Seminar, 31 October 2017.

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Speeches
31-10-2017

Interest in mixed investment funds in Denmark is growing

Danish households have invested kr. 33 billion in mixed investment funds during the past 12 months.

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Investment funds
30-10-2017

Speech by Governor Per Callesen at CBS' 100 years celebration event

Speech by Governor Per Callesen at CBS' 100 years celebration event.

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Speeches
30-10-2017

Speech by Governor Hugo Frey Jensen at the Official Monetary and Financial Institutions Forum

Speech by Governor Hugo Frey Jensen at the Official Monetary and Financial Institutions Forum, 30 October 2017.

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Speeches
27-10-2017

Broader ownership in mortgage bonds

The mortgage bonds for financing fixed-rate loans have a broader ownership base than earlier. In September 2017 the concentration of owners was low for about 80 per cent of the bond series.

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Securities
27-10-2017

Foreign investors buy long-term Danish mortgage bonds

There is a solid international interest in Danish mortgage bonds. Since January 2015, foreign portfolio investors have invested kr. 128 billion, of which kr. 18 billion in September 2017 alone.

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Portfolio investments
26-10-2017

Instalments on mortgage loans continue to increase

Instalments on households' mortgage loans have increased since the financial crisis. In the first three quarters of 2017 the total instalments were DKK 24.3 bn.

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Banking and mortgage lending, interests
26-10-2017

Lending to private customers increases for medium-sized banks

In September 2017 the largest Danish banks' decreased their lending to private customers by DKK 24 bn (10 pct.) compared with the previous year. In contrast, the medium-sized banks increased their lending to private customers by DKK 9 bn (8 pct.).

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Banking and mortgage lending, balances
20-10-2017

Economist/Senior Economist/Adviser

Do you want to be a part of our new, independent research unit?

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Career
13-10-2017

Foreign direct investment increased in 2016

In 2016 the value of Danish outward foreign direct investment, FDI, increased by kr. 87.8 billion, so that the total stock of outward FDI amounts to kr. 1,241.3 billion, cf. Chart 1. The change can be attributed to equity investments of kr. 58.9 billion and intercompany debt of kr. 17.5 billion. Equity investments are driven by capital formation and issuance of intercompany debt in existing arrangements, primarily in Europe, Asia and the USA.

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Foreign direct investment, stocks
10-10-2017

Danmarks Nationalbank's comment on the Danish Economic Council's discussion paper, autumn 2017

The Danish Economic Council's meeting. Danmarks Nationalbank's comment on the Danish Economic Council's discussion paper, autumn 2017.

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Statements
03-10-2017

Foreign Exchange and Liquidity and Monthly Balance Sheet, September 2017

​In September 2017, the foreign-exchange reserve decreased by kr. 0.12 billion to kr. 464.3 billion.

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Press Releases
02-10-2017

Speech by Governor Lars Rohde at MMF Policy Conference

Speech by Governor Lars Rohde at MMF Policy Conference in London, 2 October 2017.

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Speeches
02-10-2017

Working Paper: The ECB's unconventional monetary policy and the role of exchange rate regimes in cross-country spillovers

We study the impact of the ECB's large scale asset purchase programme on selected euro area and neighbouring countries with a particular focus on the role of the exchange rate regime. The effects of the programme are assessed by conducting an event study as well as by estimating a structural VAR model using a shadow short rate as a measure of the monetary policy stance. We find that the programme has contributed to reducing longer-term bond yields in the euro area as well as in neighbouring countries.

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Working paper
02-10-2017

Government bond spread unaffected by ECB QE

The yield spread between Danish and German government bonds has not been affected by the 2015 announcement by the European Central Bank (ECB) that it planned to purchase government bonds in the market, working paper shows.

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News
02-10-2017

Speech by Governor Per Callesen at 3S' board seminar 2 October 2017

Presentation (only in Danish) and background note on growth rates, reforms and risk of overheating from Governor Per Callesen's speech at 3S' board seminar 2 October 2017.

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Speeches
29-09-2017

Diffusion of new knowledge benefits firms' productivity

Productivity growth in the Danish economy since 1995 has been lower than previously. This reflects weak productivity growth in services, while manufacturing has maintained its strong momentum. The decline in productivity growth is an international trend. Growth in aggregate productivity is broad-based in Denmark. It is not only driven by a small group of high-productivity firms. This indicates diffusion of knowledge and technological advances. Productivity levels vary considerably across firms within the same industry.

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Analysis
25-09-2017

The Faroese economy – Boom and labour market pressure

The Faroese economy is booming. Unemployment is low, and the construction sector, in particular, is reporting labour shortages. As in earlier boom periods, Faroese fiscal policy seems to be procyclical, with a resultant risk that the economy will overheat. The Faroese government should tighten the fiscal policy, and with the economy in good shape, now is a good time to address the long-term challenges of public finances.

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Analysis
13-09-2017

Outlook for the Danish economy – Solid upswing with increased labour market pressure

The ongoing upswing in the Danish economy is solid, and the labour market pressure has increased. Growth in GDP is projected to rise to 2.3 per cent this year from 1.7 per cent last year, and the Danish economy will be in a boom in the coming years. So far, the upswing has been balanced. There is room for higher pressure on the economy during the boom, but overheating may occur suddenly and vigorously. The government should be prepared to initiate a fiscal tightening with a view to dampening growth in demand.

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Analysis
13-09-2017

The Danish economy is in a strong upswing

The current upswing in the Danish economy is solid. The growth in GDP is expected to increase to 2.3 per cent in 2017 from 1.7 per cent in 2016. This is an upward adjustment compared with Danmarks Nationalbank's March forecast. So far the recovery during the upswing has been balanced. Although the employment rises rapidly and the pressure on the labour market – especially in the construction sector – intensifies, there is a good chance that the balanced development can continue.

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News
13-09-2017

Monetary and financial trends - Stable krone and limited intervention

In the last six months, the Danish krone has been stable slightly on the strong side of the central rate vis-à-vis the euro. In the beginning of this period, Danmarks Nationalbank intervened modestly in the foreign exchange market. Danmarks Nationalbank has kept its monetary policy rates unchanged. Growth in total lending to households and the corporate sector has been moderate. The level of debt is still relatively high.

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Report
13-09-2017

The economy is in a solid upswing, but it is important to avoid overheating

​Danmarks Nationalbank expects the gross domestic product, GDP, to grow by 2.3 per cent this year. In 2018 and 2019, growth is expected to be 1.8 and 1.7 per cent, respectively.

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Press Releases
13-09-2017

Once again labour shortage in construction

The share of construction firms reporting labour shortage has almost reached the level in the mid-00s. Experience testifies to labour shortage affecting all types of construction firms when labour market pressures are high. Further stimulation of demand for construction services would not be advantageous in the current cyclical position.

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Analysis
12-09-2017

Housing taxation agreement stabilises house prices

The effects on house prices of the Housing Tax Agreement are analyzed. From 2021, housing taxes will again dampen fluctuations in house prices and thus economic cycles in general. Towards 2021, the agreement stimulates real estate prices outside the big cities, while lowering prices, e.g. on apartments in Copenhagen. Finally, it is shown that for most home buyers there is no financial incentive to advance home purchases to before 2021 just to ensure a tax relief.

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Analysis
04-09-2017

Foreign Exchange and Liquidity and Monthly Balance Sheet, August 2017

​In August 2017, the foreign-exchange reserve increased by kr. 0.6 billion to kr. 464.4 billion.

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Press Releases
18-08-2017

Danmarks Nationalbank's statement to The Danish Competition Council's analysis of the competition in the market for mortgage credit

Danmarks Nationalbank finds it positive that the analysis brings into focus the question of how a basis for enhanced competition in this market can best be achieved. Overall, Danmarks Nationalbank agrees with The Danish Competition Council's recommendation on potential amendments to financial regulation.

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Statements