subject to fiscal or financial dominance, respectively. fiscal dominance refers to a regime where monetary policy ensures the solvency of the government. as interest rates will rise in the process of normalisation, this danger could come to the fore in europe in the years ahead. financial dominance refers to the risk that monetary policy becomes increasingly concerned with adverse short - term developments in the financial system. the crisis made it obvious that price stability is not a sufficient condition for financial stability. thus, many central banks ’ mandates were extended by at least some aspects of preserving 6 / 8 bis central bankers'speeches financial stability. however, we know from tinbergen ’ s rule that every economic policy objective requires its own instrument. so it is important to keep the toolboxes separate when tackling the two objectives. inflation risks should be addressed with monetary policy instruments, and financial stability risks should primarily be addressed with macro - prudential instruments. that said, monetary policymakers are well - advised to take the implications of financial imbalances into account, since they can pose serious risks to price stability in the long run. 18 5 conclusion ladies and gentlemen, nelson mandela wrote in his autobiography “ long walk to freedom ” : “ i have discovered the secret that after climbing a great hill, one only finds that there are many more hills to climb. ” central banks all over the world were forced to climb great hills over the last decade. and there are more hills on the horizon. but central banks should beware of overburdening. 19 we are not superheroes. indeed, our powers are limited. neither can we compensate the adverse effects of demographic changes nor can we hasten the invention and adaption of new technologies. we cannot lift long - term growth. and we cannot erase inequality. wim duisenberg, the first president of the ecb, once said : “ don ’ t ask for monetary policy to perform tricks it cannot deliver. ” too much power undermines support for central bank independence. even fictional superheroes have drawn criticism when their feats involved considerable sideeffects. in the movie “ captain america : civil war ”, the first film featuring the black panther, the united nations created the sokovia accords in order to regulate the activities of the avengers. in order to defend their independence, central banks should interpret their mandates narrowly and seek the support of the broad public. people ’ s trust gives us scope to take decisions that are not always popular in the short run.

torben nielsen : financial stability, the danish perspective speech by mr torben nielsen, governor of danmarks nationalbank, arranged by the bank of finland, ivalo, 23 march 2007. * * * thank you for inviting me to talk about financial stability from a danish perspective. speech by governor torbenielsen i will start out giving an outline of the danish financial system and the changing nordic banking landscape. i will then talk about the role of danmarks nationalbank in safeguarding financial stability. looking ahead, one of our priority areas is stress testing of the danish financial system. our ambition is to learn more about how the banks affect each other and the economy in stress situations. finally, i will touch upon a topical issue, namely lending to households, household debt and house prices. the danish financial system and the changing nordic banking landscape the danish banking sector is very heterogeneous and is dominated by two large banking groups, danske bank and nordea, which covers more than 45 percent of the danish banking market. there are a small number of medium - sized institutions, jyske bank, sydbank, nykredit bank and fih, with a total market share of almost 20 percent. and we have more than 150 small banks sharing the residual market share of 35 percent. compared to the other nordic countries, the concentration ratio in denmark – measured by the concentration ratio cr5 – does not stand out. however, the nordic banking markets are amongst the most consolidated in europe – similar to other smaller european economies. in larger countries like germany and uk we find concentration ratios around 20 and 35 percent, respectively. the bulk of banking consolidation in the nordic countries took place just before – in the case of denmark – and shortly after the banking crises in finland, norway and sweden in the early 1990s. we experienced a second wave around the turn of the century with the formation of nordea as the most spectacular case. and the most recent event was danske banks purchase of sampo bank last autumn. there is a significant presence of foreign banks in denmark dominated by nordea. foreign banks and subsidiaries hold around 30 percent of total assets. expansion of foreign banks in denmark has typically not stemmed from organic growth via new branches or subsidiaries, but has instead been accomplished via mergers and acquisitions. the presence of foreign banks in denmark is comparable to norway and sweden. the finnish situation is exceptional, since nordea bank finland is counted as a swedish subsidiary and sampo bank as a danish