important issues such as geopolitical tensions, cyber threats, climate change and the green transition. these challenges also mean we face major public investments over the coming years, such as for defence, transforming our energy systems and climate protection. compared to many other countries, the danish economy is well equipped to finance this task. but it is not just about funding. and to keep one of the traditions of danmarks nationalbank, i would re - mind us that there must be room in the economy to absorb the major in - vestments. otherwise, prices and wages will rise, with the risk of renewed inflationary pressure. and we do not want to go there. thank you for your attention. 6 / 6 bis - central bankers'speeches

does not mean that higher interest costs have not had an effect. and we are now seeing the beginnings of payment difficulties in the most challenged businesses and households. furthermore, there are still significant risks related to the commercial real estate market, which i spoke about last year. this summer, the minister for industry, business and financial affairs therefore activated the sector - specific systemic risk buffer. it will be evaluated after next summer. the market expects a period of lower interest rates ahead. and you are al - ready seeing the beginnings of a decline in net interest income, which could be exacerbated by further interest rate cuts. earnings on lending, measured by the lending margin, are low and have been declining for an extended period. in addition, interest rates on housing loans have been reduced across the board during 2024. the decline in the lending margin is mainly due to the slope of the yield curve making it cheaper to finance longterm loans. at the same time, the part of the lending margin that covers the risk of loss is at its lowest level in 20 years. this may reflect strong competition for customers. but it is important that you do not underestimate the risk of loss on your loans. remember, it is in good times that bad loans are granted. climate change finally, a few words about climate change. it is a global problem and requires global solutions. that is why it is also worrying that we are seeing growing challenges with global collaboration in this area as well. 5 / 6 bis - central bankers'speeches climate change is already having a major impact in many countries. a global green transition is therefore necessary to maintain a robust economy in the long term – including in denmark. the transition may involve risks in the short term. we all need to learn more about those risks. at danmarks nationalbank, we have made some calculations considering a risk scenario where challenges arise in achieving denmark's climate goals. in the scenario, taxes on emissions must therefore be increased further compared to the already agreed taxes. this will reduce the profits of your customers who emit the most. but our analysis also shows that the overall losses on your loans are limited. however, the scenario highlights one of several risks of the transition. if multiple risks occur simultaneously or during an economic downturn, the situation could become more serious. concluding remarks to sum up : the danish economy and the financial sector are currently in a good place. but we are facing many disruptions and we are having to deal with