Publications


Please adjust your news profile if you wish to continue to receive publications from Danmarks Nationalbank. The future range of publications will consist of: News, Analysis, Report, Recommendation and Working Paper. This series will replace Monetary Review, Financial Stability, etc. Instead of the previous publications, Danmarks Nationalbank will publish reports, analyses, etc. on an ongoing basis. The forecast for the Danish economy will be published in March and September. Under News Service, please adjust your news profile and select which publications you wish to receive in future.
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14-12-2018

Central government borrowing strategy in 2019

The target for sales of domestic government bonds and T-bills in 2019 is kr. 65 billion and kr. 30 billion, respectively. This is unchanged from 2018. Issuance will be focused in the 2- and 10-year maturity segments. On 23 January, a new 10-year bond with maturity in 2029 will be opened. A new 2-year bond with maturity in 2022 will also be opened in the 1st half of the year.

14-12-2018

New financing of social housing strengthens the market for Danish government securities

In 2018, the central government has purchased all government-guaranteed mortgage bonds issued for financing social housing. The government will also bid for such bonds in 2019. The purchases allow the central government to build up series of liquid government securities and maintain a broad range of on-the-run issues. The government’s interest rate risk is independent of the coupon and maturity of the bonds purchased.

03-12-2018

Working Paper: Consistency between household-level consumption data from registers and surveys

We explore the consistency at household-level between register-imputed and survey-based consumption figures for Denmark over the period 2002-15. We find that the marginal propensities to consume out of income estimated on the basis of register data are not significantly different to those estimated on the basis of survey data.

03-12-2018

MREL for mortgage credit institutions: necessary and inexpensive

Despite the introduction of a minimum requirement of 8 per cent of total liabilities and own funds, the requirements for some SIFIs remain too low to enable recapitalisation and continuation in a crisis situation. A risk-sensitive MREL for mortgage credit institutions is necessary in order to ensure that there are sufficient funds to resolve them in a crisis situation. The cost of introducing an MREL for mortgage credit institutions is low. Converted into an increase in administration margins, it corresponds to an increase of less than 1 basis point on average.

30-11-2018

Medium-sized banks are expanding in growth areas

The medium-sized banks have expanded their activities in Aarhus and Copenhagen by opening branches and increasing their lending for housing purposes substantially. While the number of bank branches in Denmark has generally been falling for several years, the medium-sized banks have opened an additional 19 branches since 2012, most of them in growth areas such as Aarhus and Copenhagen.

30-11-2018

Low interest rates and ample lending capacity put pressure on credit standards

Overall, lending growth is limited, but the medium-sized banks have opened new branches and substantially increased lending for housing purposes in growth areas. It is important for the banks to allow for potential risks associated with entering into new market areas and to refrain from using credit standards as a competition parameter. Money laundering problems have spelled out the need for increased focus on measures to combat illegal activities. Efficient anti-money laundering measures call for stronger cross-border cooperation.

30-11-2018

The largest banks satisfy capital requirements in stress test

Danmarks Nationalbank's semi-annual stress test of the Danish banking sector shows that the largest banks satisfy all capital requirements in a severe recession scenario. The analysis also describes Danmarks Nationalbank's approach to making the adverse scenario countercyclical.

28-11-2018

Greenlandic economy - Strong growth and labour shortages

Economic growth in Greenland is high these years, and this is set to continue. The main reasons are high fish prices and larger catches. Fisheries are mainly sustainable. Unemployment is low and the risk of overheating high. Consequently, there is a need for tight fiscal policy, and large-scale investments in airports should preferably be implemented gradually. Long-term economic development requires a broader business sector, a labour force with higher qualifications and increased productivity.

20-11-2018

The banking union is not centred round joint liability

Neither the banking union nor the Economic and Monetary Union, EMU, is centred round joint liability. That is why concerns about ”footing the bill” for bank rescues in other member states should not be the key issue in an assessment of the pros and cons of Danish participation.

19-11-2018

Impacts of 2016 guidelines on mortgaging of homes

Since the financial crisis, there has been increased focus on making the financial sector more resilient. One of the tools for achieving this objective is the Danish Financial Supervisory Authority's guidelines from 2016 on prudent credit assessment when granting housing loans in growth areas. These guidelines have made borrowers in growth areas borrow less than borrowers outside the growth areas, but the impact is modest. The modest impact may be due to slow implementation, scope for deviation from the guidelines and the fact that the guidelines were in line with best practice in the institutions.

16-11-2018

Faroese economy - Mounting pressures in the labour market

The Faroese economy is booming, and labour market pressures are high. Fiscal policy should dampen demand in order to mitigate the risk of the economy overheating. Furthermore, the framework of local government finances should be tightened to ensure that the conditions are in place for fiscal policy to have a stabilising effect on the economy in future. The booming economy means that now is a good time to make public finances ready to tackle the higher expenditure associated with the ageing population in the coming decades.

15-11-2018

Working paper: Predicting distresses using deep learning of text segments in annual reports

We develop a probability-of-default model for Danish corporate firms based on deep learning that employs the managements' statements and auditors' reports of the annual reports in addition to the numerical financial variables. Our results show that the text segments provide a statistically significant enhancement of the prediction accuracy compared to models that do not employ the text segments, in particular for large firms. Our results furthermore show that the auditors' reports contain more relevant information than the managements' statements.

12-11-2018

While the sun is shining, prepare for a rainy day

The financial crisis ten years ago brought large costs to society and – as a consequence – an increase in policymakers’ focus on risks to the financial system as a whole and how to prevent and mitigate them, i.e. macroprudential policy. This paper gives an overview of key features of the Danish financial system and points to current macroprudential policy challenges. The paper sets the stage for a conference on macroprudential policy on 19 November 2018 that Danmarks Nationalbank hosts together with the European Department of the International Monetary Fund (IMF), and the Center for Financial Frictions (FRIC) at Copenhagen Business School (CBS).

02-11-2018

Working paper: Consumption Heterogeneity: Micro Drivers and Macro Implications

This paper aims to test the microfoundations of consumption models and quantify the macro implications of heterogeneity in consumption behavior. We propose a new empirical method to estimate the sensitivity of consumption to permanent and transitory income shocks and apply it to administrative data from Denmark. We find that households who stand to lose from an interest rate hike are more sensitive to income shocks than those who stand to gain. This interest rate exposure channel is potentially more important than the standard intertemporal substitution channel.

26-10-2018

Working paper: Can machine learning models capture correlations in corporate distresses?

We implement a regularly top-performing machine learning model and find that the added complexity in the model does not imply that the model is better at capturing correlation in corporate distresses compared to traditional distress models. Instead, we propose a frailty model, which allows for correlations in distresses. This model demonstrates competitive performance in terms of ranking firms by their riskiness, while providing accurate risk measures of a corporate loan portfolio.

28-09-2018

The costs of payments have fallen

The Danish Payments Council has surveyed the social costs of payments in Denmark. The social costs of payments between households and businesses have almost halved in seven years. No methods of payment have become more expensive, neither in physical nor in non-physical trade , and Danish households have access to several methods of payment with low social costs. The aggregate social costs for all types of payment were kr. 15.6 billion in 2016.

12-09-2018

A balanced Danish economy during the boom

The Danish economy is now experiencing one of the longest periods of continuous growth. The upswing has been healthier and more balanced than it was in the mid-2000s, where the economy overheated. Although labour market pressures currently exist, they are not as strong as then. The economy may continue to expand without any imbalances, but experience also shows that it can overheat suddenly and violently.

12-09-2018

Outlook for the danish economy - Boom with no signs of imbalances

The boom in the Danish economy continues, with robust growth and rising employment. Average growth in real GDP in 2017-18 is forecast at 1.8 per cent, with similar levels the next two years. Labour market pressures are mounting, and wage growth has accelerated a little. There is room for this in the economy. In good times it is important to prepare for the period after a cyclical reversal. Fiscal policy should contribute to a continually balanced upswing and should not stimulate demand further. Dampening of growth towards the end of the boom does not call for special economic policy measures.

12-09-2018

Monetary and financial trends - September 2018

The krone has been stable, and it is the longest period without interventions in the currency market since adopting the fixed exchange rate regime in 1982. The ECB continues to normalise its monetary policy and expects to end net purchases of bonds after December 2018. In recent years, Danish households have shifted to loans with lower interest rate risk and loans with amortisation. This makes their disposable income less sensitive to interest rate changes.

12-09-2018

Financial conditions are supporting the upswing

Housing and equity prices have increased significantly in recent years, while interest rates are exceptionally low. Based on a structural vector autoregressive model, these factors, combined with credit growth, are overall estimated to have contributed 0.3-0.5 percentage points per year to year-on-year GDP growth since 2016. In recent years, the contribution has been at its highest level since prior to the financial crisis in 2008. Financial conditions are expected to continue to stimulate economic growth during the 2018-20 forecast period.

10-09-2018

The labour market is slowly tightening

The Danish labour market is faced with mounting capacity pressures, but is still not showing signs of overheating. The impression, based on a broad range of indicators, is one of balanced labour market developments so far during the upswing. Viewed in isolation, a change in the demographics of the working age population has reduced the labour supply since 2008. This emphasises the need for foreign labour to support the labour demand of the upswing.

06-09-2018

Cyber resilience in the financial sector

Most of the core financial sector participants report that their levels of cyber resilience have been raised compared to 2016. A few core participants have not improved their level. That is one of the findings of a questionnaire survey conducted by Danmarks Nationalbank.

21-08-2018

MREL for mortgage banks reduces funding needs in times of crisis

Danmarks Nationalbank's calculations show that the mortgage banks' total funding need in periods of diving house prices will be smaller with an MREL than without an MREL. This is because an MREL will increase the mortgage banks' funding need in normal times, thereby ensuring that they are better prepared for periods of falling house prices and an increasing top-up collateral requirement. This will make the funding needs of the mortgage banks less sensitive to house price fluctuations.

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.

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.

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.

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.

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.

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.

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.

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.

19-06-2018

Working Paper: Active Loan Trading

The collateralized loan obligation, CLO, market withstood the recent financial crisis with minimal losses compared to other structured asset-backed securities. We investigate one unique aspect of CLOs – that the CLO manager actively maintains the collateral pool by selling and purchasing loans. We find that more active CLOs trade at better prices, provide higher returns to equity investors, and maintain lower collateral portfolio default rates than less active CLOs.

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.

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.

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.

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.

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.

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.

26-03-2018

Market fluctuations can have a large impact on net foreign assets

This analysis takes a closer look at how market fluctuations affect the value of the Danes' foreign assets and liabilities. There may be large capital gains or losses in the short term, but over a longer period of time accumulated gains and losses are close to zero. It is especially fluctuations in the dollar price, as well as Danish and international stock prices, which give capital gains or losses.

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.

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.

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.

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.

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.

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.

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.

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.

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.

​​​​​​​​​​Since 2014 Danmarks Nationalbank´s publications are issued only in electronic versions as PDF files and most of them also as ePub to use on tablets and smartphones. The electronic alternatives are of high quality, and there are many options for reading the publivations on electronic devices.​ 

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Text may be copied from Danmarks Nationalbank's publications, provided that Danmarks Nationalbank is specifically stated as the source. Changes to or misrepresentation of the content are not permitted