” decision is precisely – a decision. if we are not participating, we are de facto outside the cooperation which the participating member states have now begun. i find that unwise. in all fairness, i should say that it would not be a disaster if we waited or if we chose to opt out. there is a life outside the banking union. but non - participation will have some implications and bring some challenges that we will have to take into account in the coming years, should that be the path we choose. the implications may seem small today, but in the longer run they could be considerable. going forward, denmark cannot expect to be compared with the members of the banking union when international players try to assess the risks in the danish banking sector. instead, relevant benchmarks will be sweden and switzerland. as in denmark, the assets of the largest banks in these countries amount to approximately 1. 5 times gdp. in these countries, which will not be joining the banking union, the authorities already impose stricter bis central bankers ’ speeches requirements on the largest banks than we do. people will invariably begin to ask whether the danish requirements are sufficiently high. and so will danmarks nationalbank. in addition, it will become relatively more costly for international investors to invest in danish credit institutions. inside the banking union, investors will have to study one single rulebook and the ecb ’ s implementation of this rulebook before assessing which of the many banks within the union to invest in. we will be a small country outside the banking union. investors will have to understand our unique national setup – and where it deviates from the banking union – before assessing which danish banks they might want to invest in. that will require a lot in terms of communication from banks and authorities. but no matter how good our communication is, international investors will need to be compensated for the extra resources spent understanding our particularities. when we discuss the banking union, one issue always crops up in denmark – and not without reasons. that is the danish mortgage credit system. and, indeed, the mortgage credit system is one of the uncertainties that make the danish bankers association say “ wait and see ”. again, i do not quite follow your argument. in recent years, denmark has applied considerable political muscle to ensure that our mortgage credit system has a place in the new single european regulation. we have negotiated with 27 member states, all with their separate national interests to safeguard. and the negotiations went well. this does not mean that current

firms. this is healthy in a banking system and should induce firms with small buffers to consider whether it might be a good idea to increase their capitalisation. this applies not only to limited liability companies, but also to sole proprietors – including farms, for example. in the pre - crisis years, the danish agricultural sector experienced a land price bubble that inflated prices per hectare to unrealistic levels. the high land prices were to a large extent used to pledge land as collateral for raising further debt. since 2008, the average price per hectare has almost halved. this has left many farmers with high debts and a low equity base. this makes them more vulnerable to fluctuations in the prices of agricultural produce, which have shown considerable volatility over time. the shaky foundations of danish agriculture were partly masked by favourable conditions for the sector in the period 2010 – 13, with good prices and rising terms of trade. at the same time, farms could be financed at historically low rates of interest. nevertheless, return on equity was unsatisfactory for many farms. this points to fundamental structural problems within the agricultural sector. the prices of grain, pigs and milk have fallen since the spring, partly on account of russia ’ s boycott of western agricultural produce. however, prices have not fallen more sharply than we have seen on many previous occasions, and the current price level is relatively normal in a long - term perspective. production and sale of highly volatile goods such as agricultural produce require well - consolidated production units that are resilient to such repeated price fluctuations. the current situation has highlighted the weak capital base of many farms. capitalisation must be strengthened. now i will turn my attention to the banking union. on tuesday, 4 november 2014, the eu ’ s single supervisory mechanism entered into force. responsibility for major supervisory tasks in the participating member states was transferred to the ecb. this marks an important step in the implementation of the banking union. seen from the outside – from denmark – it is difficult to spot any change. but we must not be mistaken. 4 november 2014 was a red - letter day in europe. the member states participating in the banking union have set the future course for supervision and crisis management of their banks. bis central bankers ’ speeches they have chosen to have one strong authority to supervise all their banks in future. and they have chosen to transfer responsibility for crisis management to a single resolution board from january 2016. this resolution board will guarantee credible and consistent application of the bail - in