, and later it turned out that some banks had eased their credit conditions far too much. so a rise in lending is not immediately on the cards. credit institutions operating in such a market should be particularly thorough when assessing potential borrowers. this includes taking into account the fact that house prices can fluctuate considerably. when the housing bubble of the 2000s burst, it became clear that a maximum ltv ratio of 80 per cent for mortgage loans does not necessarily ensure that the value of the home exceeds the value of the mortgage loan when prices fall. if we look at the mortgage statistics, we can see that lending is increasing most strongly in the urban areas, which is hardly surprising as this is where the largest house price rises are seen. demand for loans is also highest in these areas. but new loans are also being granted in rural areas, and the number of municipalities where extraordinary prepayments are exceeding new lending is very small. this indicates that if there is sufficient collateral to mortgage, loans are granted. no matter where the property is located. the challenge of declining populations in some areas is not solved by granting more credit. * * * turning to monetary policy, the beginning of the year was unusually eventful. following the decision by the swiss national bank on 15 january to discontinue the minimum exchange rate for the swiss franc against the euro, we saw an unprecedented increase in demand for danish kroner. against that background, danmarks nationalbank took a number of unusual steps. we intervened in the foreign exchange market by selling kroner for a larger amount than ever before in our history, and the benchmark monetary policy interest rate – the rate of interest on certificates of deposit – was reduced to – 0. 75 per cent. on the recommendation of danmarks nationalbank, the ministry of finance also suspended issuance of danish government bonds temporarily, and finally an extraordinary increase of the limit on the monetary policy counterparties ’ current account deposits at danmarks nationalbank was introduced. these measures had the desired effect. the krone remained stable close to its central rate, and towards the end of february the inflow of foreign exchange ceased. in recent months, the situation in relation to the krone has gradually normalised, and danmarks nationalbank has sold foreign exchange in the market for a considerable amount. on the recommendation of danmarks nationalbank, the ministry of finance has therefore decided to resume issuance of government bonds effective from october 2015. at the same time, the

extraordinary increase of the current account limit has been rolled back. bis central bankers ’ speeches january - february this year was by no means the first time danmarks nationalbank had to take resolute action to defend the fixed exchange rate policy. and it will probably not be the last time. situations where the krone is under pressure seldom resemble previous situations. the triggers and series of events differ from time to time, and although danmarks nationalbank in principle applies the same reaction function, our reaction must be adapted to the specific circumstances. nevertheless, i think we should reflect on the lessons than can be learned from the most recent episode. firstly, we must realise that pressure on the krone can go either way. there is no law of nature saying that the krone always tends to weaken in a crisis. on the contrary, denmark ’ s role as a creditor nation, which means that we have net foreign assets, means that future krone crises are likely more frequently to result in upward pressure. in january - february, capital flows were larger than in previous episodes when the krone has been under pressure. while the interest rate typically is the most important instrument in a situation where the krone tends to weaken, intervention in the foreign exchange market potentially plays a larger role when capital is flowing into the country. in that situation there is no upper limit to the amount that danmarks nationalbank can make available in kroner. the very low level of interest rates in denmark means that danmarks nationalbank profits from the increase in the foreign exchange reserve. the fixed exchange rate policy has served denmark well for more than 30 years and is the foundation for stable macroeconomic development. the pressure on the krone gave us an opportunity to demonstrate, once again, that this policy is not up for discussion. denmark ’ s overall economic policy is aimed at supporting the fixed exchange rate policy, and we have the means and the will to defend the krone. even if the situation calls for extraordinary measures. * * * finally, i would like to talk about what the new crisis management regime means for the mortgage banks. basically, the bank recovery and resolution directive establishes a common framework for the resolution of credit institutions across the eu. the underlying philosophy is that losses should be borne by those who took the risks. in other words, owners and creditors. public funds should be protected. those are the rules applying to other firms, and they should also apply to banks and mortgage banks. that will support market discipline