, transport companies and financers, among others. news spread very fast through this network. after napoleon's defeat at waterloo, the rothschild family received the news – before the british government! they purchased british government bonds, and when news of the victory arrived, prices rose, making the rothschild family even wealthier. at the core of the family's success was the foresight of mayer rothschild, which led him to conclude a partnership agreement with his sons at an early date. this agreement was aimed at ensuring a strong family - owned business based on the father's solid reputation as a businessman. the family was to benefit from the reputation that mayer rothschild had built up. furthermore, mayer and his sons were to share the profits from the business empire, which meant that they took an interest in each other's affairs and the partnership as such. in other words, the business empire was based on the principle of everyone having something at stake. * * * * * * * * * my other retrospective example relates to a period of around 30 years in mid - 19th century usa. before this period, every single bank in the usa had to have a charter through special legislation for that specific bank. however, this changed when many states began to introduce state charters describing the general requirements to be met by banks that wanted a licence to operate. this period has been called the " free banking " era page 2 of 8 because anyone meeting the relevant state's banking requirements could establish a bank. a bank was typically established by selling shares – " subscriptions " – and by using the funds received to purchase government bonds. if you wanted to operate a bank, you had to deposit government bonds to back the banknotes issued by the bank. the banknotes were used by traders, and there were " banknote reporters " who prepared lists of counterfeits and listed the prices of the various banknotes. later generations have interpreted this period in different ways. a number of banks failed, so initially it was investigated whether they misused their special position, e. g. by having insufficient backing for the banknotes issued. in the literature, these banks were referred to as " wildcat banks ". later, the view of the period changed, and focus is now on market discipline during this period. this was reflected in the market's ability to price the risk on the banknotes from the individual banks, which was of paramount importance to the bank's reputation. there were banks that failed, but

hugo frey jensen : creating relations in a digital new ( banking ) world speech by mr hugo frey jensen, governor of the national bank of denmark, at the director ’ s conference of the danish bankers association, copenhagen, 8 september 2014. * * * thank you for inviting me to speak here today. the heading of today ’ s conference – “ creating relations in a digital new ( banking ) world ” – shows that the banks now have the strength and resources to look forward after a few years in the shadow of the financial crisis. this is positive and on the whole tallies with danmarks nationalbank ’ s assessment of the economic situation and the general condition of the banking sector. the danish economy is recovering after some difficult years. admittedly, the most recent figures show a small decline in gdp in the 2nd quarter, but viewed in a larger context, activity has grown since the end of 2012. it is important to stay focused on the underlying trend and not to become hypnotised by quarter - on - quarter fluctuations. decreasing north sea oil output is reducing overall production these years. if this factor is disregarded, value added in the danish economy is now 2 per cent higher than in 2012 – and rising. the increase in activity has also been reflected in the labour market, where employment has been picking up over the last year or so. employment is developing at a steadier pace than production. as a result, productivity development is a little jerky, which is quite normal for the danish economy. as the economy has improved, pressures on the danish banks have gradually eased. but a few banks are suffering from the repercussions of the crisis and several banks are still struggling with low return on equity. the sector has ample excess liquidity cover, and for this reason danmarks nationalbank has phased out the temporary measures introduced to boost the banks ’ liquidity. these included the option to raise 6 - month loans from danmarks nationalbank and to pledge sector company shares and credit claims as collateral. the financial crisis is over, but it has left its mark. above all, the crisis has reduced the number of banks in denmark. as the chart shows, it has amplified a trend that has been evident for many years. in our monetary review from the 4th quarter of 2013, we examined productivity and cost efficiency in the financial sector. in terms of the cost - to - income ratio, denmark seems to differ from comparable countries. the figures indicate that resource consumption within the sector has