Engelsk

​In May 2023, the foreign-exchange reserve increased by kr. 0.4 billion to kr. 603.3 billion. The increase reflects Danmarks Nationalbank's net purchase of foreign exchange for kr. 1.2 billion, and the central government's net repayment of foreign debt for kr. 0.8 billion.

​The largest banks still have a solid liquidity position, but challenges faced by specific foreign banks have highlighted the importance of sound risk management for the banks.

By 2023, because of inflation and rising interest rates the monthly budget of an additional 3.4 percent of homeowners would be insufficient to obtain their current loans from a Danish credit institute. Further, in case of unemployment the budget of 3 out of 4 affected households would be severely impacted despite insurance and spousal income.

Higher interest rates and consumer prices are draining the resilience of household customers, with spillover effects on businesses. At the same time, banks are generating increased net interest income because of the development in interest rates. Increased earnings may counter the effect from higher impairment charges, which may be the result of the higher interest rates in the long term. In March, problems in specific foreign banks highlighted the need for sound risk management in banks – which includes a sufficient excess capital relative to the regulatory requirements.

Firms’ sensitivities to business cycles differ by size and age. The differences are large: “young and small firms” are more cyclical than large firms, whereas “old and small” firms are closer to acyclical. A heterogeneous-firm model with heterogeneous returns to scale can replicate these findings, and implies changes in the potency of different stabilisation policies.

In April 2023, the average interest rate difference was 1.63 percentage points on new loans with fixed and variable interest rates. The figure applies to the homeowners' new loans paid out in April and is calculated before contributions. This difference was 3.40 percentage points six months ago.

We develop a model with partially unfunded debt to propose a fiscal theory of persistent inflation. After the pandemic, unfunded fiscal shocks sustain the recovery, but also cause a persistent increase in inflation. The model predicts the inflationary effects of the ARPA stimulus out of sample and using real-time data.

On 25 May 2023, Danmarks Nationalbank Governor Signe Krogstrup gave a speech at the Local Banks' annual meeting on the latest economic development and financial stability. In addition, she touched on a number of current topics in the financial sector, including CBDC and climate. (The presentation is in Danish only).