and credit quality may deteriorate. not in one's own bank, but among competitors. the banks face the major task of incorporating the new international accounting standards and the forthcoming capital - adequacy rules – basel ii. this requires considerable resources. it is also an important task requiring each bank to assess its need for buffers against bad times. other parts of the financial sector have also devoted many resources to new legislation and its implementation. the european commission has now indicated that all major legislation is in place in the financial area. now we need to make the single market for financial services work. the imf is assessing the entire financial system in denmark as part of its financial sector assessment program – fsap. let us take this as a good opportunity for a service check. it is good to take a fresh look at whether we have an optimum structure in relation to international standards. the imf has just concluded a two - week visit to denmark. i would like to thank the members of the danish bankers association and a large number of the other players in the financial system for their efforts in connection with this visit. fsap is a long process and there is still considerable work ahead in the coming months. the imf's final assessment of denmark and its recommendations are expected to be presented in mid - 2006. bodil ( nyboe andersen ) has asked me to extent her gratitude for your fine cooperation – not only over the past year, but over many years. i hope this fine cooperation will continue in the years to come.

their deposits to pool schemes. as negative deposit rates for households are still a recent development, we can only speculate on their wider implications. when new data becomes available, it will be pertinent to study to which extent negative deposit rates lead households to increase their spending – for example by this threshold typically applies only if the customer uses the bank as its primary bank – otherwise negative rates apply to the full amount. currently households pay negative interest on approximately one third of their total bank deposits. see abildgren ; kim and andreas kuchler, 2020, do firms behave differently when nominal interest rates are below zero?, danmarks nationalbank, working paper no. 164. see mandsberg, rasmus kofoed, alexander meldgaard otte and morten spange, 2021, the response of household customers to negative deposit rates, danmarks nationalbank, analysis, no. 9, page 6 of 7 purchasing a new car or move to a more expensive home. if this is the case, negative deposit rates may lead to more lending. but if households instead simply reduce their deposits by paying back debt, lending could decline. concluding remarks the transmission of negative policy rates is likely to differ across countries for a number of reasons. for example, some countries have legislation that restricts banks from imposing negative deposit rates. 8 nevertheless, the key lesson that i draw from our experience is that for the financial sector, negative interest rates are increasingly becoming business as usual. even the key non - linearity associated with negative rates – the lack of transmission to deposit rates – is fading. for non - financial firms, preliminary evidence suggests that the introduction of negative deposit rates had real effects on top of the standard effects of a rate cut. this may also have been the case for households although more evidence is needed in this area. but as firms and households become more accustomed to paying interest on their deposits, these effects may be attenuated. of course, there is a limit to how low rates can go. but we have seen that negative policy rates are a viable policy tool in a world of low equilibrium interest rates. demographic factors suggest equilibrium interest rates are likely to remain low for the foreseeable future. this suggests that the topic for this conference could not have been more relevant. thank you for your attention! see european banking authority, 2020, risk assessment questionnaire – summary of the results. page 7 of 7 danmarks nationalbank ultra low interest rates from the perspective of a