introduced for sifis that include mortgage credit institutions. for them, the sum of the mrel and capital and debt buffer requirements must constitute at least 8 per cent of total liabilities and own funds. the amendment is a step in the right direction. however, it does not solve the problem ; there are still sifis for which the requirements are not sufficiently high for the institutions to be recapitalised and continued in a crisis situation. furthermore, the problem with the current requirement for mortgage credit institutions is that it is not risk - sensitive. the mrel is. it increases when risks increase, as they typically do in bad times. that is why we need an mrel for mortgage credit institutions. and here is the good news. at danmarks nationalbank we have calculated the costs of introducing an mrel for mortgage credit institutions now that we have the 8 per cent requirement. and the costs are negligible. page 3 of 6 our calculations show that the sector's total costs will be in the range of kr. 100 to 200 million. the institutions can finance this by reducing costs or dividend payments. if they choose to raise their administration margins instead, we have calculated that the cost is equivalent to an average increase of less than 1 basis point in administration margins. surely that is a low price to pay for ensuring that mortgage credit institutions can be resolved without jeopardising financial stability and taxpayer funds? as i see it, this is the right thing to do. i would like to wake up in the morning, drink a cup of coffee and know that we make the right choices for society. doing away with the exemption will also give the authorities the option of using the resolution fund if required. my final message regarding resolution is this : a precondition for credible resolution is that financial institutions can be handled without any knockon effect on the sector overall. i would like to make it clear that for danmarks nationalbank it is of the essence that mortgage bonds do not suffer losses. fortunately, the bank recovery and resolution directive – brrd – provides a solution : it is possible to exclude certain liabilities and own funds from being written down or converted. that should be the case for mortgage bonds. instead, there must be sufficient eligible liabilities and own funds. that is why we should have an mrel for mortgage credit institutions. - - - - anti - money laundering and crisis resolution rules – the two topics i have talked about so far – are examples

speech speech by governor lars rohde at the annual meeting of finance denmark 2018 check against delivery 3 december 2018 thank you for inviting me to speak here today. in an age when partnerships are discontinued, and walls are built between countries, i find it important to focus on the considerable advantages to our society and its continued development which rule - based international cooperation offers. i have chosen to talk about three topical issues which, in their separate ways, relate to cross - border cooperation and which are essential to financial stability in denmark. they are : anti - money laundering, crisis resolution of mortgage credit institutions and the banking union. but first i would like to express my appreciation of the good cooperation we have had in many areas. you contributed strongly to the process of connecting the danish krone to target2 - securities. it is a great step forward that danish banks are now able to settle securities via the single european settlement platform. many of you have also helped to launch kronos2, and we have jointly achieved significant results in the payments council. in the fsor, we have increased the cyber resilience of the financial sector, and we have agreed to perform sophisticated tests of the resilience of the individual institutions in the coming years – known as the red team tests. - - - - unfortunately, money laundering has been on everyone's lips in 2018. a simple search in infomedia shows that the danish word " hvidvask " has been used four times as frequently this year as in 2017. side 1 af 6 we have witnessed extensive misuse of the financial infrastructure for illegal activities. there has been and still is a need to strengthen efforts in this area. at danmarks nationalbank we are interested in this issue because money laundering can jeopardise financial stability. customer and investor confidence is an essential prerequisite for providing financial services. so, loss of confidence can be very harmful for a bank. if confidence in a single participant is eroded, this may rapidly have an impact on the rest of the sector. the reputation of the authorities and the country may also be severely affected. this became very clear to me at the imf annual meeting in october when i received many enquiries about the money laundering challenge in the danish financial sector. banks play a key role in the financial infrastructure. and with this role comes an important social responsibility. a responsibility for ensuring that their businesses are not used for illegal activities. the number of suspicious transactions reported to the anti - money laundering