large - scale test of the financial sector's crisis response plans conducted the week before last. it really put the sector's ability to work together and coordinate efforts in the event of an extensive cyberattack on critical systems to the test. it was an educational experience. we all learned a few lessons and came home with knowledge that we can use in our further efforts. and fortunately it was only a test. but if it becomes necessary, we are ready. it is better to activate the crisis response one time too many than one time too few. one of danmarks nationalbank's tasks is to ensure that the danish economy is robust. an important element of a robust economy is a financial sector with a robust infrastructure. there is more work to do for the whole sector, but focus must be on the efforts made by the individual sector participants. thank you for your attention. page 5 of 5

a boom in house prices and private consumption, leading to the peak in 1986. the until then highly preferential tax treatment of interest - rate expenditures was reduced as from 1987. a decline in actual inflation in combination with the tax changes led to a sharp increase in ex - post after - tax real interest rates that triggered the proceeding depression in the housing market and a strong increase in the private savings ratio. the danish experience over the last twenty years is thus that “ home made ” domestic shocks stemming from economic policy are more important than exogenous external shocks. the choice of exchange - rate regime is not a choice between a fixed nominal exchange rate and a floating exchange rate that evolves according to purchasing power parity. a floating exchange rate often moves relatively far away from any reasonable estimate of purchasing power parity and thus acts as a shock creator rather than a shock absorber, cf. buiter ( 2000 ). the strength of the dollar in the mid - 1980s and the weakness of the euro until recently are well - known examples. the importance of such unwarranted disturbances is most severe for small open economies such as denmark. the exchange - rate movements depicted in chart 7 and chart 8 indicate that sweden - a small open economy with a floating exchange rate and low inflation - receives far more noise from exchange - rate fluctuations than denmark. the fixed - exchange - rate policy cannot ensure a stable nominal effective exchange rate or a stable real effective exchange rate. however, the weight to the euro in the effective danish exchange rate is slightly below 60 per cent. thereby, the fixed - exchange - rate policy yields a nominal hedge in a very important market for the danish economy. this planning stability is beneficial to the business climate. a fixed - exchange - rate policy based on the nominal effective exchange rate would not offer such a hedge against any specific currency. 4. monetary policy implementation and erm ii the krone has remained close to the central parity against the euro since erm ii and the third stage of the european monetary union came into operation on 1 january 1999, cf. chart 9. in order to achieve exchange - rate stability, the interest rates of danmarks nationalbank are adjusted in step with those of the ecb, with due consideration of conditions in the foreign - exchange market, cf. chart 10. a tendency for the krone to weaken will be met by a widening of the interest - rate differential, and vice versa. interventions in the foreign - exchange market are used to dampen