april, danmarks nationalbank was able to lower its discount rate to 1. 75 per cent – the lowest level since the establishment of danmarks nationalbank in 1818. although the lending rate is slightly higher, the short - term interest rate is historically low. long - term interest rates have decreased less than policy rates. the central banks of several countries, including the uk and the usa, are buying back bonds to force down long - term interest rates in order to stimulate the economy. it remains to be seen whether the european central bank will steer a similar course. if it does, long - term interest rates in denmark could also be affected. it is essential that the current extraordinary stimulus measures do not increase long - term inflationary expectations as this would create problems for the economy in the longer term as a result of measures to mitigate the current crisis. thanks to the low policy rates, the banks can borrow from danmarks nationalbank at low cost. but danmarks nationalbank is by no means the only source of financing for danish banks. the financial crisis has generally made it more difficult for the banks to obtain financing in the international money and financial markets. this has entailed higher financing costs. the importance of the international money markets as a source of financing has grown over the last 10 years as growth in the banks'deposits has lagged behind growth in lending. the higher financing costs have been passed on to the banks'customers. since last autumn, the banks have again reduced their interest rates somewhat. the decline in deposit rates has more or less mirrored the reduction in policy rates, while lending rates for households and the corporate sector have declined a little less. the result is higher interest margins for the banks, at a time when losses are expected to increase for a period to come. in addition, the banks'contribution to the financing of the government guarantee under bank rescue package i will amount to kr. 35 billion. danmarks nationalbank's interest rates are guidelines for the banks'interest rates, but a one - to - one relation should not be expected. the credit terms for bank and mortgage customers have been tightened further since last autumn. this is evident from danmarks nationalbank's latest bank lending survey. the tightening has been most pronounced for corporate loans. in the survey, the respondents give the more gloomy risk outlook as the main reason. the risks have proved to be greater that the institutions expected three months ago. the mortgage - credit institutes also state the supplementary

trade conflict between the us and china may be a trigger. in general, history shows that upswings are inevitably followed by downturns in a market economy. the danish economy is well - positioned to withstand a possible global downturn. the upswing over the past six years has been balanced. low rates have not resulted in an excessive surge in investments nor hampered household savings. on the contrary, the household consumption ratio is relatively low, despite rising disposable incomes and high household net wealth. let me conclude with a few thoughts on the title of this speech : " low for long - causes and consequences ". the pertinent question is " how long is long ". we do not know. what we do know is that it will be prudent for the financial sector and investors to prepare for a long period of very low interest rates. this is - so to speak - the new normal. it creates new challenges for the financial sector. the only thing you can do is to adapt. and the same is true for monetary policy. thank you for listening. page 6 of 6 danmarks nationalbank low for long – causes and consequences governor lars rohde, cfa society denmark conference, 19 september 2019 danish government bonds : the whole curve is in negative territory per cent 1. 00 0. 75 0. 50 ultimo 2018 0. 25 0. 00 - 0. 25 september 2019 - 0. 50 - 0. 75 - 1. 00 duration note : the yield curve on the 16 september 2019. 18. september 2019 decline in the natural real interest rate ( r * ) per cent real interest rate - 2 natural real interest rate - 4 - 6 source : danmarks nationalbank. 18. september 2019 selected contributers to the global savings glut private financial wealth in per cent of global gdp source : credit suisse global wealth databook, oecd, imf, norsk oliefond. 18. september 2019 low level of inflation at present per cent, y - y per cent long term interest rate ( right hand axes ) inflation - 5 - 5 - 10 - 10 - 15 - 15 - 20 - 20 18. september 2019 unconventional monetary policy is playing a larger role per cent billion euro 5, 000 4, 000 danmarks nationalbank's monetary policy rate 3, 000 balance sheet ecb 2, 000 ecb's monetary policy rate 1, 000 - 2 18. september 2019 synchronised cycle in nordic