in interest rates. i see no urgent need for further specific legislation in these areas as you are seriously addressing the challenges yourselves. let me recapitulate : solutions may differ, but should serve the following purposes – in random order : – refinancing risk must be reduced, – the need for any top - up collateral must be met before it becomes relevant, – the procyclical impact of home financing should be dampened, – and the vulnerability of homeowners to extraordinary changes in financing conditions must be reduced. it will require a huge effort, but you have already come a long way. keep up the good work! thank you for your attention. bis central bankers ’ speeches

around half of total demand. another reason why i believe we can say that the danish economy is now slowly picking up is that the fundamental balances are sound. we have a large current - account surplus and a relatively strong labour market. structural unemployment is low – and only slightly below the current rate of unemployment. interest rates are historically low and underlying prices are stable. on the other hand, house prices have, on average, dropped by 20 per cent since the peak in 2007 and fell by 8 per cent in 2011. turnover is low despite the historically low interest rates, and the market seems to be in a deadlock. given the current interest - rate and income levels, bis central bankers ’ speeches house prices should, in danmarks nationalbank ’ s view, not be as low as they are at the moment. price falls may be self - reinforcing if buyers hesitate, expecting prices to come down even further. so it is difficult to say exactly when the market will turn, but experience from both denmark and abroad shows that once the market begins to recover, it could move fast. an important factor behind the large fluctuations in house prices seen since the mid - 2000s is the structure of housing taxes. if the property value tax in nominal terms is frozen, as it is now, the effective taxation rate declines when prices go up, and vice versa. combined with deferred - amortisation loans, this has contributed to stronger fluctuations in house prices. the same applies to the cap on the increase in land tax. as a result, tax on the large increases in value seen during the boom is being phased in now, when prices are falling, making the decline even stronger. as regards property value tax, the solution is, in principle, simple. freeze the rate of taxation, not the amount in kroner. with the current outlook for the housing market, this will not lead to higher taxes right now. but more appropriate housing taxes will help to dampen fluctuations in the market – fluctuations that are detrimental to society and impede the implementation of economic policy. the large balance sheets of danish households, with high gross debt and correspondingly large assets, also speak in favour of curbing house price fluctuations. * * * it is now around four years since the international financial crisis really hit denmark. in the meantime, it has led to the introduction of five bank rescue packages, each one aimed at solving specific problems. in addition, danmarks nationalbank has made a number of adjustments