if the level of disbursement will be considerably lower. lower disbursements will contribute to increasing capitalisation, making it easier to meet higher capital targets. the banking union the issue of denmark's participation in the strengthened banking cooperation – or the banking union, as it is called – is returning to the political agenda. page 4 of 6 perhaps i should start by commenting on the linguistic confusion resulting from the term " banking union ". the banking union is not a union of banks. nor is it a cooperation between banks, as the official danish name could indicate. the banking union is cooperation at the european level between national authorities and two european authorities on supervision and crisis resolution of banks. " the strengthened banking authority cooperation " would be a more appropriate name. if only it had sounded a little more natural. i presume you are all aware that we at danmarks nationalbank have been in favour of this cooperation ever since the issue was first discussed in 2014 and 2015. at that time we believed that it would be right for denmark to participate in the banking union. and we still believe that. why? basically because we believe that we should do what we can to ensure financial stability in this country. there can be no doubt that participation in the banking union will strengthen overall supervision of danish credit institutions. an extra layer will be added : an international dimension and international competences in addition to those already existing in the danish financial supervisory authority. after all, the banking union is a combined mechanism. the national supervisory authorities continue to play a key role. they do so within the single supervisory mechanism, ssm, which supervises the very largest institutions. this may not sound all that attractive to you. but from a financial stability perspective, and for denmark as a whole, it is definitely an advantage. overall, we will have a stronger financial supervisory authority. we should seize this opportunity without delay! for you, it will also mean a more level playing field in relation to your competitors in the euro area. such enhanced competition will also be a clear advantage for danish households and firms. now and then concerns are expressed as to whether the single supervisory mechanism will have sufficient understanding of the danish financial sector. and in this context our unique mortgage credit system is often mentioned. page 5 of 6 these concerns are unfounded. the ssm currently handles many different business models in the euro area member states. and, as i have already mentioned, the danish financial supervisory authority, which has profound insight into the

the benefit of hindsight, it appears that the global economy hit bottom in the first half of last year. since the middle of last year, various economic indicators have improved, and a salient feature is that improvement in manufacturing activities and international trade has become clear in both advanced and emerging economies ( chart 5 ). the global economy since the outbreak of the global financial crisis has been characterized by what has been labeled " slow trade, " a phenomenon of the trade volume having remained sluggish relative to the economic growth rate, but this trend now appears to be changing. in addition, following the presidential election in the united states, business sentiment - - especially among u. s. firms - - has greatly increased, reflecting expectations that the growth rate will accelerate on the basis of proactive economic policies by the new administration. as a result, the growth momentum of the global economy is steadily gathering pace ( chart 6 ). amid these favorable developments in the global economy, improvements have been observed in japan's economy as well. one is that a pick - up in exports and production is becoming evident. against the backdrop of strong global it - related demand and progress in inventory and capital stock adjustments in emerging economies, the range of items in which exports are increasing has steadily widened and the growth in exports is gradually becoming more sustained. production is picking up as well, reflecting moderate increases in domestic and overseas demand as well as progress in inventory adjustments. under these circumstances, corporate profits are improving and business fixed investment is on a moderate increasing trend. another is that private consumption is picking up. despite steady improvements in the employment and income situation, such as the drop in the unemployment rate to about 3 percent and moderate wage growth, private consumption showed relatively weak developments in the first half of last year. this was likely due mainly to the impact on consumer sentiment of the negative wealth effects resulting from the decline in stock prices. in recent months, consumer sentiment has been improving steadily, partly due to the recovery in stock prices, and the consumption activity index ( cai ), which the bank compiles by combining various sales and supply - side statistics, has picked up since last summer ( chart 7 ). japan's economy is more firmly making steps toward a recovery. going forward, with the virtuous cycle from income to spending being maintained in both the corporate and household sectors, the economy is likely to continue growing at a pace above its potential. b. the current situation of and outlook for prices next, i