i think, necessary for improving our understanding of how to preserve financial stability in the current context. the second issue is the potential spillover effects of monetary normalisation on emerging markets. the ‘ taper tantrum ’ of 2013 exposed the vulnerability of emerging markets to tightening global financial conditions. this time, most analysts expect the effects to be more benign, given the increased resilience of some key emerging economies and the favourable ( for them ) commodity prices, but we do not really know to what extent this might remain a cause of financial vulnerability. there are very good papers in this workshop on global fund flows and emerging markets, on the currency structure of corporate debt, on exchange rates, and on the effects of foreign monetary policy on inflation in emerging countries. it might be interesting to see these issues through the lens of monetary policy normalisation as well. the final issue i would like to mention is the transmission of monetary policy through the lending channel. a tightening of credit standards by banks might amplify the impulse from monetary policy normalisation. one interesting way to look at this issue is to consider the heterogeneity of banks in terms of ( say ) market power, screening processes, balance ‑ sheet strength, and possibly other factors. a further aspect that has become increasingly relevant is the role of macroprudential policy. conceptually, macro ‑ pru tools have strong complementarities with monetary policy, but we still know too little of the way they work in practice, given the relative novelty of their systematic use. there are excellent papers in the programme, both theoretical and empirical, on the transmission of monetary policy in an environment with heterogeneous banks and on the link between monetary and macroprudential policies. what lessons can we learn about the effects of monetary policy normalisation on the lending channel, and on the interactions between the monetary stance and what we might call the ‘ prudential stance ’? these are just a few of the many interesting topics that the workshop will address. others include the impact of multinationals on inflation co ‑ movements around the world, the role of a safe asset for international financial stability, and the functioning of central banks ’ swap lines at the beginning of the pandemic. it is a rich menu ; we shall learn a lot. i would like to thank the organisers for their efforts ; the presenters and discussants, and the keynote speaker, for their contributions ; all of you for being here to take part in this debate.

nils bernstein : challenges ahead for the danish economy speech by mr nils bernstein, governor of the national bank of denmark, at the annual meeting of the danish bankers association, copenhagen, 6 december 2010. * * * the world economy is slowly emerging from the crisis. global developments are diverse, with strong growth in the asian emerging economies and parts of south america and slower growth in the old industrialised countries. it remains uncertain to which extent private consumption in the usa and europe will take over when the government stimulus programmes expire and the necessary fiscal consolidation starts. high rates of unemployment and uncertainty about the future will dampen private consumption. investment will gradually begin to fuel the economy again, while the contribution from stock rebuilding will fade away. in germany and sweden – denmark ’ s two largest export markets – growth has been surprisingly positive so far. for denmark, danmarks nationalbank expects growth in the coming year to be just under 2 per cent, driven by moderate increases in private consumption, business investments and exports. the outlook is still subject to considerable uncertainty. the economy is presumably more likely to underperform than to exceed expectations. the developments on the korean peninsula remind us how strongly we can be influenced by uncontrollable events far from our part of the world. in europe we have recently witnessed at close hand what the consequences can be when markets lose confidence in the ability of sovereign states to manage their own debt problems. first it was iceland, then latvia, then greece and now ireland. where will it all end? fortunately, europe has so far been willing and able to lend a hand in collaboration with the imf. but if confidence is to be restored, the member states in question must make drastic cuts in public - sector wages, pensions, etc. while also raising taxes substantially. this goes hand in hand with social unrest and loss of international reputation. denmark is also facing a number of fiscal challenges. they are not as severe as in many other countries, but nevertheless they must be addressed in time so that they do not grow. the economic recovery plan deals with the period until 2015, but after that adverse demographics will increase the government deficit for many years – unless action is taken. if we in denmark are to avoid government debt growing to unmanageable proportions in the long term, we will need to increase taxes, adding to the already heavy tax burden, and put a much tighter rein on public spending than ever before. in addition, we need labour market reforms to boost the supply of