banking union has a broad scope of caring for the internal market, ensuring efficient cross - border cooperation and breaking the link between sovereign and banks, creating better mutual insurance. thus, it is a matter for all eu countries. the central bank has urged the government to engage actively in discussions of developments of the full the banking union, including potential participation in the single supervisory mechanism. it is our impression that this is taken up well. bis central bankers ’ speeches 4. ftt finally, a few words on the financial transaction tax, which i understand has been a focus area for icma. in short, we share the concerns raised about this. banks are wrong if they complain about higher capital requirements. they are right if they complain about ftts. some issues debated have been the difficulties of ensuring the global coverage of such a tax and the incidence of costs. the real and most important issue should, however, be how such a tax will affect the functioning of the detailed machinery of financial markets. a few observations : we observed in the financial crisis that illiquidity is problematic and can trigger large difficulties. bank regulation therefore calls for larger liquidity buffers. the ftt is effectually a tax on market liquidity and thus works counter to the intention of liquidity regulation. as liquidity in secondary markets is intentionally reduced by introducing an ftt, one should expect higher investor premiums in primary markets. this will raise funding costs in many markets, including for government debt. very many transactions are undertaken by financial institutions on behalf of non - financial companies in order to mitigate risks of fluctuation of currencies, raw materials etc. higher costs of such insurance would likely lead to less risk mitigation, or in other words more “ speculative ” exposures. as regards volatility in financial markets it is doubtful that less liquid markets would reduce such volatility. here the effects tend to move in different directions and the literature tends to be inconclusive. markets for real products would probably be more volatile. if financial instruments can no longer serve the functioning of smoothing and shift the risk of exposures to those who can professionally bear it at smaller costs. overall an ftt does not fit well with current efforts to repair the financial system. thank you for the attention! bis central bankers ’ speeches

signs of improvement. the supply of homes for sale has decreased considerably in the last nine months, and although this does not reflect higher turnover, it may well help to stabilise prices. in our forecast, we assume that the tide will turn in the 2nd half of the year, and prices will begin to rise moderately. prices are estimated to be slightly below their equilibrium level, based on the current low interest rates. the future development in prices is subject to much uncertainty. interest rates on home loans are presumably lower in denmark than anywhere else at the moment. the low interest rates generally help to buoy up the housing market. for buyers this means that with a fixed - rate loan the “ housing burden ” is now below its long - term average. if they opt for a variable - rate loan instead, the housing burden is very low at present. this is likely to attract more buyers. * * * if we take a bird ’ s eye view of the danish economy and compare ourselves with other countries, we can see, on the one hand, that we are not among those most severely affected by the crisis. on the other hand, we too need to fix a few problems. our financial sector is undergoing an adaptation process in response to the financial crisis. new rules have been introduced, and the defences have been strengthened. structural developments are affecting the sector and will do so for some time to come. as i see it, a serious and targeted effort is being made, and the sector will emerge from this process strengthened – so that it will take more to shake its foundations next time a crisis hits us. but we have some way to go. bad loans still dampen earnings. danish firms are challenged by weak demand, a high level of costs and a trend in productivity which is on the low side in an international comparison. if the output gap, i. e. the excess capacity in the danish economy, is to be closed, these issues must be addressed. this cannot be achieved overnight. the business sector focuses much on what others can do, including on borrowing options. i am fully aware that some firms have difficulty in convincing their banks that it makes sense to lend them more money. but in general, firms are saving up and do not see finances as an impediment to production. bis central bankers ’ speeches i would also like to make it clear that, in danmarks nationalbank ’ s opinion, the framework conditions for funding the corporate sector should be based on market solutions