banking community. a spotlight that intensified in 2015 when – out of the blue – the swiss national bank abandoned the floor of the swiss franc against the euro. the swiss decision led investors to look for comparable candidates to abandon their peg. with only few countries to look for, denmark immediately experienced a massive inflow of currency. consequently, the krone came under strong pressure to appreciate against the euro. those hectic weeks in beginning of 2015 stand clear in my memory. the whole bank was buzzing with activity. we were all on alert. we sold kroner of a historical amount of 275 billion – corresponding to 37 billion euros. and in just three weeks, we cut the deposit rate four times to - 0. 75 per cent. an unprecedented low. also, on our recommendation, the government suspended the issuance of bonds. like a qe programme, this reduced the supply of bonds available to investors, thereby pushing yields lower. throughout the crisis, i repeated one message time and again : “ we will not abandon the peg ”. and in the end, the speculators got the message. leaving them with significant financial losses. while we had additional earnings of just over 2 billion kroner. during the first decades of our policy regime, we developed experience in dealing with large currency outflows. the fact that episodes of pressure in foreign exchange markets can now result in substantial currency inflows is testament to our strong economic fundamentals. more recently, the exchange rate peg weathered the pandemic crisis. while we resorted to applying our monetary policy tools, there was not much drama. that is eye - catching considering the severity of the crisis. it reflects the robustness and the confidence that has been built up in the danish economy over the past 40 years. * * * closing of the speech * * * so let me conclude : throughout the last 40 years we have shown both the determination and the ability to pursue a fixed exchange rate policy. page 6 of 7 we have the necessary tools, and we are backed by support from the government. together, we stand shoulder to shoulder in our commitment to the peg. the policy also enjoys support from across the political spectrum as well as from economic experts, the financial community, the business community as well as from the labour unions. this is testament to the strong results that the policy has delivered for the danish economy over the last 40 years. thank you for your attention! page 7 of 7

hard to control ex post. effective communication, as always, is crucial, especially in situations of heightened uncertainty. the central bank can consider adjusting its communication pre - emptively in order to discourage the formation of overly optimistic expectations regarding future returns and / or in order to signal concerns about too low risk premia. in any case, monetary authorities, through their communication, should avoid appearing complacent, thus possibly contributing themselves to unrealistic expectations and asset - price dynamics that are not in line with fundamentals. finally, central banks should not be seen as reacting asymmetrically to asset price movements ; that is, as only reacting to mitigate the consequences of a fall in asset prices. obviously, such asymmetric behaviour can lead to moral hazard in the market, with the central bank becoming a potential contributor to excessive asset price fluctuations, if its actions induce private agents to take higher risks than would otherwise be the case. what is the situation in the euro area housing and equity markets? after these rather general considerations, let us look at the current situation in the euro area? what are the underlying factors fuelling recent developments in asset prices? are these developments a cause for concern and what are the associated risks? let me first focus on residential property markets. as already noted, growth rates in euro area property prices have been rather dynamic in recent years. after relatively modest price increases of less than 3 % between 1993 and 1998, residential property prices on average for the euro area as a whole have been rising at annual rates of around 6 - 7 % in each of the past four years. in real terms, this corresponds to growth rates of 4 - 5 %, which is relatively high by historic standards. differences across euro area countries have been considerable : while in spain, france, ireland and italy, residential property prices were rising on an annual basis by between 11 % and 17 % in 2002 and 2003, they have been falling slightly in germany and austria in the last four years. the dynamism of property prices in several euro area countries is very much related to the very low levels of interest rates brought about by the introduction of the euro. for several euro area countries, the adoption of the euro marked a significant fall in real interest rates, as it implied a “ regime change ” towards a more stable macroeconomic environment. the fall in interest rates, in turn, allowed households to borrow more and accumulate more debt. as a consequence, household indebtedness in the euro