brrd is a large step in the right direction. but, looking ahead, what is the main challenge for a financial supervisory authority and for financial stability? seen from a danish supervisory perspective, it must be the everincreasing complexity of the very large banking groups and the internationalisation of banking activities. large banking groups are complex to operate. and they are complex to supervise. there is nothing new in that, but it is becoming increasingly evident. page 5 of 7 supervision of the largest banks means supervision of major international players with customers and a presence in multiple countries. that in itself is a challenge for the supervisory authority. in addition, risk management and the methods applied are becoming still more advanced. naturally, there are also many other challenges. one of them is digitalisation, which entails a gradual change in the competitive situation of the banks. developments require that the competences of the supervisory authorities constantly evolve so that they are a match for the banks. this is more easily achieved by working together. as i see it, that is the single most important reason why denmark naturally belongs within the strengthened banking cooperation – or the banking union, as it is also called. if denmark joins the strengthened banking cooperation, the danish financial supervisory authority will continue to play a significant role in relation to supervising danish banks. but it will be supplemented with the single supervisory mechanism, ssm, which involves the ecb and all other national supervisory authorities within the banking cooperation. the ssm is headed by the supervisory board, of which the danish financial supervisory authority will be a member. the single supervisory authority of the ecb leads the supervision of the largest and most complex banks within the cooperation. danish participation in this cooperation will boost the competences of the authority which is to scrutinise the largest danish credit institutions. the single supervisory authority in frankfurt can attract experts from all over europe. and it is currently building up considerable experience via its supervision of a number of very large banks. it is of paramount importance to financial stability that our supervisory authority has the competences to match the large banks. and it is equally important that we have a resolution authority with the necessary insight and resources to resolve the largest danish banks. it is considerably easier to build up and maintain such supervisory powers if you have many " customers ". the quality of the resolution also increases if you gradually accumulate experience in resolving large banks. the strengthened banking cooperation is a further development of the single market for financial services, which denmark is part of.

it strengthens the overall european supervisory powers and creates a more level page 6 of 7 playing field for credit institutions in europe. we ought to be able to agree on opting in. joining the strengthened banking cooperation will be a natural step on the journey that financial regulation has taken over the past many years. by joining the banking cooperation, we will become part of a supervisory structure that will be a match for the large banks. and it is necessary to match them – in the interests of society and of the banks themselves. * * * * * * * * * i started by talking about pulling rabbits out of top hats and sawing ladies in half. but don't get me wrong. banking is no joking matter. regulation of the banks is necessary as they play a special role in society. financial regulation and the financial supervisory function, which has now existed in denmark for 100 years, are primarily there for the citizens and firms – not for the banks. banking and rules undergo continuous change. take for example payment services, where costs to society are almost halfed since 2009. increased competition and innovation is something we should welcome. future financial services and functions will perhaps be delivered by new actors. they may claim they are not banks and therefore should not be subject to supervision. however, the guiding principle should always be that it is the function which is regulated. the new challenges for the supervisory authority are best solved in close and binding cross - border cooperation, which is precisely what the strengthened banking cooperation is about. none of us know what tomorrow brings. but it is our duty to do our best to protect the fundamental financial functions of our society. thank you. page 7 of 7