many ways the situation has normalised. but we have learnt what it means to be outside the euro area when you are a small economy with a fixed - exchange - rate regime. this should give food for thought. we made it through. i will not ponder upon – at least not openly – what could have happened if speculation against the krone hadn ’ t subsided. we are still in a fixed exchange rate regime. as recent developments have shown, euro membership is not – and should not – be a guarantee for easy access to foreign borrowing. that depends on one ’ s ability to keep its own house in order. there is no substitute for sound economic policy inside or outside the euro. but when you are a small open economy and a storm of this magnitude sweeps through the markets – you would rather not have your own currency to worry about. thank you for your attention. chart 1 chart 2 chart 3 chart 4 chart 5 chart 6 chart 7 chart 8

countries. the low rate of interest on variable - rate mortgage loans has often been identified as the reason why the finances of the households are, nevertheless, generally sound. this raises the question of how robust household finances are to rising interest rates, and whether an increase could jeopardise financial stability. today we are able to provide a fairly detailed answer to these questions. the main conclusion of an extensive study of household finances is that the threat to financial stability from household debt and its composition is limited. the assessment is based on the share of the debt held by families with particularly tight budgets. most families have robust finances and are resilient to negative events such as a strong increase in interest rates or a protracted period of unemployment if they reduce consumption or savings, although this may entail considerable lifestyle changes. and this assessment does not even take into account that a continuous rise in interest rates is very likely to go hand in hand with an economic recovery and hence better employment opportunities. obviously this assessment of the risk to financial stability does not rule out the possibility that higher interest rates could have rather unpleasant implications for families with very tight finances. * * * bis central bankers ’ speeches before i step down, it might be appropriate to reflect on some of the experience i have gained during my seven years as governor of danmarks nationalbank. naturally, it will only be a brief summary. without doubt, the financial crisis is the single event that has had the strongest impact on the financial sector during my tenure. how prepared were we? how did we tackle the crisis itself? which follow - up steps should we take? these are important questions. regardless of our actions, denmark is a small, open economy and we would have been hit by the international financial crisis which from the autumn of 2008 caused international trade to contract by 20 per cent and later led to a european debt crisis that has descended like a fog of uncertainty on the european economies. the key question is whether we in denmark had made ourselves vulnerable to the severe shock that hit us from abroad. the answer is an unqualified “ yes ”. even without a financial crisis, the danish economy would have been under pressure. in this country, the preceding international boom with ample liquidity and low interest rates was allowed to develop into an unusual overheating of the economy, which was already slowing down when the shock hit us. the tax freeze, tax cuts, growth in public spending and new mortgage types were the domestic factors behind the overheating.