to a small degree. since 2004 the propensity to consume has shown an increase equivalent to approximately kr. 15 billion, while housing wealth has risen by kr. 670 billion. it is true that the capital gains have been further mortgaged, but the proceeds have mainly been used for home improvements or pension contributions, or invested in other financial assets. for more than 200 years we have had a secure mortgage financing system with a large, standardised mortgage - credit bond market that has given borrowers access on equal terms to finance real property at long - term interest rates in the capital market. however, in recent times the mortgage - credit system has undergone many changes : mortgage credit no longer comprises associations of borrowers, with members holding joint and several liability that join forces to gain access to a less developed capital market. today, the players are profit - maximising limited - liability companies in an economy with well - developed capital markets. mortgage - credit institutes and banks have become more closely connected in different ways. credit institutions from other eu member states can compete freely in denmark, and danish credit institutions have become active in financing real property abroad. finally, there has been considerable development of new products – for example adjustable - rate loans, capped adjustable - rate loans and deferred - amortisation loans. in this way, mortgage credit has become a product like other commercial financial products in an open economy with a mature financial system. this dynamic has not changed danmarks nationalbank's fundamental perception of the mortgagecredit system. danmarks nationalbank has always found it to be a secure system, beneficial for borrowers, lenders, the capital market, and financial stability. now a new type of covered bonds enters the market, called sdos. at the last annual meeting i called for a thorough review of the future regulations for use of sdos. i would like to acknowledge that this review has been undertaken, and there is now political agreement on a new act on sdos. overall, i believe this to be a good result. the bill also makes it possible for the mortgage - credit institutes to provide mortgage credit financed by issuing bonds in exactly the same way as today. danmarks nationalbank has considered this to be important. for some years the banks have competed with the mortgage - credit institutes to offer mortgage credit, among other things by introducing their mortgage loans. in addition, they also increasingly compete with foreign credit institutions – both in denmark and abroad. now the banks will have the

.......................................... net herlands......................................... poland................................................... port ugal................................................ spain.................................................... swit zerland........................................... uk..................................................... uk..................................................... usa..................................................... nominal nominal nominal linker nominal nominal nominal nominal nominal linker nominal nominal nominal nominal nominal nominal nominal linker nominal turnover rate of german federal securities 2006 bubills ( 6 months ) schatz ( 2 years ) bobls ( 5 years )