action to be taken had not been laid down on beforehand, and denmark clearly lacked the tools to manage the situation. although the size of roskilde bank was not in itself sufficient to make it systemic, the turmoil in the financial markets meant that there was, in danmarks nationalbank ’ s assessment, a considerable risk of a knock - on effect on other banks. in the end, danmarks nationalbank and the rest of the banking sector purchased roskilde bank for zero kroner. in other words, the subordinated capital had been lost, and the private banks provided a guarantee of kr. 750 million to cover further losses. but as it turned out the losses were in fact far greater. a large number of danish banks became distressed in the period around the autumn of 2008. from the beginning of 2008 to the beginning of 2009, 18 danish banks were wound up, acquired or merged with other banks. all of these were small banks. with bank rescue package 3 of september 2010, a bank resolution scheme was established in denmark. the government - owned financial stability company was put in bis central bankers ’ speeches charge of the resolution of distressed banks, thereby assuming the role that danmarks nationalbank had had in connection with roskilde bank. under bank rescue package 3, not only shareholders, but also unsecured and subordinated creditors could lose their money if a bank failed. this was in accordance with international recommendations, but nevertheless caused a bit of a stir internationally, and led to a general downgrading of danish banks. the first bank to be wound up under bank rescue package 3 was amagerbanken – a regional bank based in the copenhagen area. i will not go into detail, but merely note that we now have a mechanism for handling distressed banks which works and which ensures, that taxpayers will not ultimately pay for a distressed bank. denmark was among the first countries to introduce a bank resolution scheme under which those who had lent money to the distressed bank could also lose their investment. this has made headlines, and i am surprised to note that even very small danish banks in distress still find their way to the pages of the financial times. recently it was a very small bank in the south of jutland, tønder bank. in my opinion that is out of proportion. over the weekend another local bank, sparekassen lolland, has been taken over by the larger jyske bank along the same lines, i. e. a private solution. it

would change. danmarks nationalbank would go from being banker to the banks to being banker to the general public. in that way we would be competing directly with the commercial banks, e. g. by offering deposit accounts and payment services, a role not traditionally assumed by central banks. the introduction of central bank digital currency would also create a risk of financial instability by increasing the risk of systemic bank runs. today it is difficult to carry out a run on the danish banking system overall unless deposits are moved to abroad. but in practice it is not possible to exchange all bank deposits for cash. but with central bank digital curren - page 4 of 7 cy, bank runs can take place rapidly and become systemic. in periods of loss of confidence in the danish banking sector, this is possible despite the deposit guarantee scheme and any higher interest on bank deposits. so i can set your minds at ease : danmarks nationalbank has no plans to compete directly with the banks. as you know, danmarks nationalbank's objectives are to contribute to ensuring financial stability, stable prices and safe payments. * * * i will now turn to the issue of how to resolve large banks and mortgage banks in a crisis situation. a precondition for preparing credible resolution plans for the largest danish financial institutions – the sifis – is that a group can be resolved as a single corporation. the resolution authorities should apply a single point of entry resolution strategy aimed at recapitalising and continuing the whole group. this is because the sifis are deeply integrated, both commercially and operationally. since the plan is to recapitalise the whole group, own funds and eligible liabilities must, of course, be issued for recapitalisation of all parts of the group. to ensure the necessary credibility of the resolution plans, the minimum requirement for own funds and eligible liabilities, mrel, must observe three principles. slide 5 : 3 key principles firstly, the mrel must reflect the current risks of the specific sifi. the requirement cannot be capped as is the case for the current debt buffer. for high - risk institutions, a cap on the mrel would mean insufficient liabilities eligible for writing - down and hence for covering the losses that may occur. for currently low - risk institutions, the requirement will be too low if the risks increase. as a result, the mrel will be too low precisely at the time when own funds and eligible liabilities are required for absorbing losses. that