##marks nationalbank tends to track that of the ecb very closely. in denmark, we have had negative rates for some years now. so far, their implications have been far less exciting or radical than some might have expected before entering negative territory. basically, negative interest rates have just been a continuation of low rates, with strong passthrough to money market rates. however, the financial sector has had to adapt to the new environment. negative interest rates have put pressure on banks'earnings slide 5 : households are exempt from negative deposit rates first of all, negative rates have challenged danish banks'business models. net interest margins and thereby net interest income have been squeezed. the introduction of negative policy rates has meant that a significant share of bank deposits with danmarks nationalbank is currently being remunerated at a rate of - 0. 65 per cent. while lending rates have mirrored the fall in monetary policy rates, banks have been reluctant to page 3 of 9 introduce negative deposit rates on household deposits. this likely reflects concerns about reputational risks. in contrast, negative rates have been more widely introduced on corporate deposits. the spread between short term and long term interest rates is also important for banks ’ maturity transformation business. the ecb ’ s large scale asset purchases have worked to reduce the spread between long term and short term interest rates. this has made such efforts less profitable for banks. these declining margins have lowered banks'net interest income significantly. the largest banks have so far been able to compensate by expanding into new business areas, such as wealth management, and by adjusting their fees. smaller banks typically rely more heavily on deposit funding. for them, the adjustment has been much more difficult. on the positive side, negative interest rates have contributed to a favourable macroeconomic climate driving loan impairment charges to a minimum. the effect from very low impairment charges is one of the main explanations for the record - high results booked by the largest danish banks in recent years. these results have been achieved despite the pressure from falling interest margins. increased resilience of banks should lower the expected return on equity slide 6 : more resilience and low interest rate : required return on bank equity can be lowered with the strengthening of profits in recent years, danish banks have clearly put the financial crisis behind them. equally important, we now have a financial sector that is much more robust than prior to the crisis. the financial crisis revealed that many financial institutions were insufficiently capitalised. as a result, some of them were not

we know there will soon be legislative action from the european commission, which is expected to help in the expansion of instant payments. we are looking forward to this action, later in summer, as it is to address impediments and enhance public confidence in the instrument. broader adoption of instant payments is, in my view, crucial for the payments landscape, particularly in greece where the instant feature can become a game changer in the effort to reduce the use of cash – which remains significant in the country. seamless cross - border use of the instrument, now made possible by tips, and strengthening of legal certainty ( to be addressed by new eu legislation ) are of essential importance. the adoption of instant payments in greece can bring clear benefits : speed and efficiency, facilitation of various commercial transactions, removal of red tape, rationalization of public sector procedures, reduction of tax - evasion. we are therefore supportive of all relevant work done at the level of the eurosystem and the european fora. such issues, together with many other topics, will probably be the subject of your proceedings during this conference. in the area of payments, cooperation and interaction of central banks with the private sector is key, and this conference is suitably designed to bring both sides on the stage and set the ground for a fruitful dialogue. i hope the city of athens will provide the surroundings for productive discussions and interesting conclusions in the following days. again, a warm welcome to all of you. and my best wishes for success in this year ’ s conference!