Banking and payments

The Danish payments infrastructure


Abstract icon The Danish payments infrastructure is the network of systems that makes it possible for consumers, corporations and financial actors to exchange payments and securities transactions. On an average banking day, payments totalling around kr. 640 billion are cleared and settled through the core IT systems of the Danish financial infrastructure.
  • Kronos2 is Danmarks Nationalbank's RTGS (Real-Time Gross Settlement) system for payments in Danish kroner and is primarily used for settlement of large-value, time-critical interbank payments. Most banks in Denmark hold accounts at Danmarks Nationalbank. Via these accounts and Kronos2, they settle their mutual accounts and their accounts with Danmarks Nationalbank. In addition, Kronos2 also settles monetary policy operations and net positions from connected payment and settlement systems.
  • The Sumclearing, the Intradagclearing and the Straksclearing are Finance Denmark's settlement systems for settlement of Danish retail payments. Final transfer of money between the banks is effected via accounts at Danmarks Nationalbank.
  • ES-CPH settlement, which is owned by Euronext Securities Copenhagen, is a system for settling securities transactions. In a securities transaction, securities are exchanged via custody accounts in ES-CPH, while payment is exchanged via the participants' Kronos2 accounts.
  • CLS, which is owned by large international banks, is a multilateral system for foreign-exchange transactions in 18 currencies at present. The krone leg in the banks' foreign-exchange transactions is settled via CLS Bank's account at Danmarks Nationalbank.
  • Scandinavian Cash Pool is a system for pledging of cross-border collateral for intraday credit in Danish and Norwegian kroner and Swedish kronor. The main principle of SCP is that liquidity raised from the central bank of one country can be pledged as collateral to the central bank of another country.
  • Target2 is the Eurosystem's system for payments in euro and is primarily used for settlement of large-value, time-critical payments between participants.
  • Target2-Securities, T2S, is a trans-European system for settlement of securities transactions in euro and in Danish kroner.

The following chart shows payment flows in the Danish infrastructure for krone payments. Target2 is not included as it handles payments in euro.

 

 

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Payment systems

Payment settlement is the transfer of money from a remitter to a recipient. An example is payment using banknotes and coins. However, most payments are settled electronically nowadays via payment systems.