would change. danmarks nationalbank would go from being banker to the banks to being banker to the general public. in that way we would be competing directly with the commercial banks, e. g. by offering deposit accounts and payment services, a role not traditionally assumed by central banks. the introduction of central bank digital currency would also create a risk of financial instability by increasing the risk of systemic bank runs. today it is difficult to carry out a run on the danish banking system overall unless deposits are moved to abroad. but in practice it is not possible to exchange all bank deposits for cash. but with central bank digital curren - page 4 of 7 cy, bank runs can take place rapidly and become systemic. in periods of loss of confidence in the danish banking sector, this is possible despite the deposit guarantee scheme and any higher interest on bank deposits. so i can set your minds at ease : danmarks nationalbank has no plans to compete directly with the banks. as you know, danmarks nationalbank's objectives are to contribute to ensuring financial stability, stable prices and safe payments. * * * i will now turn to the issue of how to resolve large banks and mortgage banks in a crisis situation. a precondition for preparing credible resolution plans for the largest danish financial institutions – the sifis – is that a group can be resolved as a single corporation. the resolution authorities should apply a single point of entry resolution strategy aimed at recapitalising and continuing the whole group. this is because the sifis are deeply integrated, both commercially and operationally. since the plan is to recapitalise the whole group, own funds and eligible liabilities must, of course, be issued for recapitalisation of all parts of the group. to ensure the necessary credibility of the resolution plans, the minimum requirement for own funds and eligible liabilities, mrel, must observe three principles. slide 5 : 3 key principles firstly, the mrel must reflect the current risks of the specific sifi. the requirement cannot be capped as is the case for the current debt buffer. for high - risk institutions, a cap on the mrel would mean insufficient liabilities eligible for writing - down and hence for covering the losses that may occur. for currently low - risk institutions, the requirement will be too low if the risks increase. as a result, the mrel will be too low precisely at the time when own funds and eligible liabilities are required for absorbing losses. that

speech speech by governor lars rohde at the annual meeting of finance denmark 2017 check against delivery 4 december 2017 thank you for inviting me to speak here today. i will be delivering three key messages : optimism and large lending capacity are boosting the banks'risk appetite. danmarks nationalbank is not planning to issue central bank digital currency to the public. and last but not least : the risky ties between the government and the financial sector should be broken. slide 2 : full steam ahead for the financial sector first, i would like to talk about developments in the financial sector. we have put the financial crisis behind us. the sector is now better capitalised than before the crisis. danmarks nationalbank's most recent stress test shows that all sifis are able to meet the minimum capital requirements in a severe recession. there is a sentiment of optimism in the financial sector, both in denmark and abroad. the banks and their customers have regained their risk appetite and at the same time there is plenty of liquidity in the global financial markets. in other words – there is a basis for a general increase in risk - taking. and indeed, we are seeing signs of this. fortunately, the economy is picking up steam again. that is clearly visible from the bottom lines of the banks and mortgage banks. page 1 of 7 these institutions now have considerable capacity to increase lending, and many have stated that they are easing their credit standards. lending fluctuates with the business cycle, so it is only natural that lending grows in an economic upswing. in some respects, current developments are similar to the period leading up to the financial crisis in 2008. but there is one major difference, and that relates to credit growth, which is still well below the strong level seen in the pre - crisis period. all the same, it is worth noting that total lending remains at a very high level and that it did not fall at any time in the years of economic downturn. slide 3 : financial risks if we zoom in on the trend in lending, there are signs of risks building up. banks and mortgage banks are increasing lending to vulnerable households with high debt ratios and the medium - sized banks have increased lending to cyclical industries. so no, credit growth is not soaring at the moment. but yes, risks are building up. the level of interest rates is low and risk appetite is high. combined with the economic upswing, rising asset prices and potentially strong credit growth, this is a toxic cocktail