per callesen : a central banker ’ s perspective on european regulatory reform speech by mr per callesen, governor of the national bank of denmark, at the international capital market association ’ s ( icma ) and nordic capital markets forum ’ s ( ncmf ) annual conference on regulatory reform and nordic capital markets, copenhagen, 18 march 2014. * * * thank you for the invitation! for this topic of european regulatory reform i have chosen to highlight, first a number of the most prominent financial regulatory issues in denmark over the past year that are also related to the broader european agenda, and second, the implications of the european banking union going forward. capital and liquidity regulation at the heart of basel iii and the implementing legislation in the european union ( crr / crdiv ) has been stricter regulatory requirements of capital and liquidity. we have come a long way in many countries, including in this country, to ensure better capitalisation of banks. authorities have raised capital requirements by implementing the eu legislation, and in several instances going somewhat beyond this by taking advantage of the room for national discretion included in the directives. perhaps even more importantly, bank themselves have taken steps to become substantially better capitalised, often going well beyond the regulatory minimum requirement. in recent surveys, danish banks stand out as top performers in a european context when it comes to early compliance with fully phased - in stricter minimum rules for capital. this is wise. the largest danish bank did very recently raise new additional tier 1 capital at a fairly low price, a price which was lower than recent, similar issuances by other eu banks. this confirms the old textbook lesson that solid capitalization is a cornerstone for lower funding costs. had banks across our continent had similar levels of capitalisation before the financial crisis struck as our danish banks do today, i am confident that the crisis would have been a rather different one and also the international debate and actions for reregulating banking would have been quite different. should banks, well advised and at the broader international level, decide to move further in the direction of increasingly adding distance to the difference between actual capitalisation and regulatory requirement, interesting new aspects may come up. first, the financial system would be safer. second, funding costs are likely to come down. third, other regulatory and supervisory practices may possibly become less intrusive over time. liquidity regulation, especially the liquidity coverage ratio ( lcr ), which measures banks ’ ability to withstand short

highly fruitful. to a large extent, the use of nontraditional data, machine learning, and natural language processing in macroeconomics and for policy is only just in its infancy. in many cases, we are unsure of the efficacy or benefits of these approaches. coordination between statistical agencies and policymaking institutions will help us achieve our shared goal — a better understanding of the economy. to this end, the discussions on the use of big data and new techniques for central banking and on the possibilities for cooperation between private companies and government agencies should be particularly helpful. moreover, i strongly encourage you to continue your discussions after the conference ends and to seek opportunities for joint work so that we can further develop our understanding of big data and textual analysis. now i would like to invite the participants in the session on alternative data on inflation and the labor market to come to the podium. welcome to the federal reserve, and i wish you a successful two days. 1 / 1 bis central bankers'speeches