Lars Rohde: Financial sector developments, digital currency and risky ties in Denmark

Speech by Mr Lars Rohde, Governor of the National Bank of Denmark, at the annual meeting of Finance Denmark, Copenhagen, 4 December 2017.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Thank you for inviting me to speak here today.

I will be delivering three key messages:

• Optimism and large lending capacity are boosting the banks' risk appetite.
• Danmarks Nationalbank is not planning to issue central bank digital currency to the public.
• And last but not least: the risky ties between the government and the financial sector should be broken.

Slide 2: Full steam ahead for the financial sector

First, I would like to talk about developments in the financial sector. We have put the financial crisis behind us. The sector is now better capitalised than before the crisis. Danmarks Nationalbank's most recent stress test shows that all SIFIs are able to meet the minimum capital requirements in a severe recession.

There is a sentiment of optimism in the financial sector, both in Denmark and abroad. The banks and their customers have regained their risk appetite and at the same time there is plenty of liquidity in the global financial markets.

In other words - there is a basis for a general increase in risk-taking. And indeed, we are seeing signs of this.

Fortunately, the economy is picking up steam again. That is clearly visible from the bottom lines of the banks and mortgage banks.