Some of our collaborations are arranged in order to solve very specific tasks, while others are more informal and based on professional sparring and knowledge sharing. Both types of cooperation add to our professional insights, and help to keep us on our toes concerning the Danish and international economies.
Among the most important international forums for Danmarks Nationalbank are the International Monetary Fund (IMF), the European System of Central Banks (ESCB), the European Union (EU) and the Bank for International Settlements (BIS).
Collaboration with the IMF
The IMF works to support global growth and financial stability for its 190 member countries. It does so, for example, by conducting analyses each year of the economies and financial sectors of its member countries as well as proposing economic reforms. It also makes loans to member countries which are finding it difficult to meet their international payment obligations because of economic imbalances. In addition, the IMF offers technical assistance to its member countries, especially to low and middle-income countries so that they can manage their finances effectively.
Denmark’s relations with the IMF are handled by Danmarks Nationalbank in cooperation with the Danish Ministry of Finance. Denmark is represented in three decision-making bodies in the IMF: in the Board of Governors, in the International Monetary and Financial Committee (IMFC) and on the Executive Board. Danmarks Nationalbank also handles Denmark’s accounts with the IMF.
IMF’s Board of Governors
The Board of Governors is the IMF’s highest decision-making body. All IMF member countries have a representative, who is usually the country’s central bank governor or finance minister. Denmark’s representative is Governor Christian Kettel Thomsen, while the Permanent Secretary of the Danish Ministry of Finance is his deputy.
Internation Monitary and Financial Committee (IMFC)
The IMFC was established by the Board of Governors of the IMF and is an advisory committee that deals with the broad strategic guidelines for the work of the IMF. In the IMFC, Denmark shares the post with the other Nordic and Baltic countries which form the Nordic-Baltic Constituency (NBC): Denmark, Norway, Sweden, Finland, Iceland, Estonia, Latvia and Lithuania. The IMFC post rotates between the NBC countries according to a defined rotation principle.
The IMFC meets twice a year and, in concluding the meetings, issues a communiqué that reflects the committee’s desired direction for the IMF’s work.
IMF’s Executive Board
The Executive Board handles the day-to-day tasks and meets several times a week. As in the IMFC, member countries are represented either individually or in constituencies. Denmark is represented on the Executive Board through the Nordic-Baltic Constituency, which jointly appoints an Executive Director who represents the interests of the Nordic-Baltic countries in the IMF. Danmarks Nationalbank and the Danish Ministry of Finance therefore coordinate Denmark’s views with the other constituency members.
The IMF’s analyses of the Danish economy
The IMF regularly assesses the Danish economy and the financial system through the Article IV reports and the Financial System Stability Assessment programme.
The Article IV report provides an international perspective on the Danish economy
About once a year, a team of IMF economists come to Denmark to analyse the Danish economy. The visits are called Article IV visits, and are mandatory for each member country according to Article IV of the IMF’s Articles of Agreement, hence the name. Six months beforehand, the IMF makes a preparatory visit, known as an interim visit. The visits are part of the IMF’s surveillance of its member countries’ economic and financial development. During the visits, the IMF holds meetings with relevant ministries, advisory bodies, trade and industry associations and private sector participants.
The IMF’s analysis includes, for example, recommendations for reforms of the national economy and is summarised in an Article IV report.
Financial Sector Assessment Programme (FSAP)
Since 1999, the IMF has prepared in-depth analyses of the financial system in connection with its Financial Sector Assessment Programme (FSAP). The purpose is to reduce the risk of crises in the international financial markets. Denmark is on the IMF’s list of countries with a systemically important financial sector, and the IMF therefore carries out an analysis of Denmark’s financial sector about every five years.
The IMF's report on money laundering threats in the Nordic-Baltic region
The eight countries of the Nordic-Baltic Constituency of the International Monetary Fund (IMF) took the initiative in 2021 to engage the IMF to conduct a regional analysis of cross-border money laundering (ML) threats and vulnerabilities, along with an analysis of the impact on financial stability.
The IMF's report on money laundering threats in the Nordic-Baltic region was published on 4 September 2023.
Cooperation with the European Central Bank (ECB) and the European System of Central Banks (ESCB)
Although Denmark does not use the euro, Danmarks Nationalbank participates in significant aspects of the European central bank cooperation on an equal footing with other central banks outside the euro area. Danmarks Nationalbank is part of the European System of Central Banks (ESCB). The ESCB is made up of the European Central Bank (ECB) and the central banks of all 27 EU member states. The central banks of the EU member states that have adopted the euro only participate in part of the cooperation. That part of the ESCB which is responsible for cooperation on the euro and the single monetary policy is called the Eurosystem.
The ECB and the Eurosystem
The ECB and the national central banks of the euro area member states – together the Eurosystem – cooperate closely and are responsible for the single monetary policy of the euro area. The objective of the single monetary policy is to ensure stable prices in the euro area. The monetary policy can support the euro area member states’ general economic policies – for example to ensure high growth and employment – but only if it can happen without jeopardising the goal of low inflation.
In addition to monetary policy, the Eurosystem also carries out various other tasks typical of central banks, such as the production of financial statistics, the management of foreign reserves and the development and maintenance of payment systems.
Composition of the ECB
The ECB’s management is made up of three bodies – the Executive Board, the Governing Council and the General Council.
The Executive Board is responsible for day-to-day management and for implementing monetary policy decisions taken by the Governing Council. The Governing Council is the ECB’s highest decision-making body, and makes monetary policy decisions including the need for interest rate changes.
The General Council performs an advisory and coordinating role. The council is made up of the president and vice-president of the ECB and the governors of the central banks of all EU countries. Governor Christian Kettel Thomsen is Danmarks Nationalbank’s representative. The General Council contributes, among other things, to the preparations when new member states wish to adopt the euro. In addition, it regularly discusses economic and financial developments and the functioning of the EU’s exchange rate mechanism, ERM II.
The General Council is maintained for as long as there are EU countries outside the euro area.
Cooperation with the EU
Danmarks Nationalbank participates in EU cooperation on economic and financial matters. Besides central bank cooperation in the EU, Danmarks Nationalbank and the other EU central banks participate in parts of the EU’s economic and financial cooperation. This mainly takes place under the auspices of the Economic and Financial Committee (EFC). The EFC is composed of representatives of both central banks and the respective economic ministries. Governor Signe Krogstrup represents Danmarks Nationalbank.
The EFC was set up in accordance with the EU Treaty, which stipulates that the committee’s main tasks include the following:
to deliver opinions to the Economic and Financial Affairs Council (Ecofin) or to the Commission on economic and financial issues of significance to the EU. The EFC may deliver such opinions on its own initiative or at the request of the Council or of the Commission.
to keep under review the economic and financial situation of the member states and of the Union and to report on it regularly to the Council and to the Commission. This means that the EFC plays a large role in terms of, for example, monitoring whether member states observe the EU requirements of sound economic policies, including sound public finances. The EFC also regularly monitors financial stability in the EU, and coordinates the EU’s work related to financial connections with non-EU member states and with international institutions such as the International Monetary Fund (IMF). Finally, the EFC plays a key role in examining and reporting on the situation regarding the movement of capital and the freedom of payments within the EU.
Depending on the specific topics discussed, the EFC may meet with or without representatives of the central banks. Themes relevant to the euro area member states may only be discussed by the Euro Working Group, a body resembling the EFC.
Cooperation with the BIS
Danmarks Nationalbank is a member of the Bank for International Settlements (BIS). The BIS aims to support monetary and financial stability globally. This is done through international cooperation between central banks and by the BIS acting as a bank for central banks.
As a BIS member, Danmarks Nationalbank regularly participates in meetings for the BIS’s circle of central bank governors as well as in the BIS committee for central bank statistics. Governor Christian Kettel Thomsen is Danmarks Nationalbank’s representative.
BIS Innovation Hub Nordic Centre
Together with the BIS and the central banks in Sweden, Norway and Iceland, Danmarks Nationalbank has established the BIS Innovation Hub Nordic Centre in Stockholm.
Danmarks Nationalbank, together with the four other participating central banks, contributes to the work and closely follows the development of the projects in the Nordic Innovation Centre.