buffers in a stress scenario. in such a situation, they will, in fact, come into conflict with other requirements. these are now the rules of the game, and the institutions must and need to take this into account in their capital planning. page 5 of 7 the new requirements are a result of the global concerns about the banks and their risk assessments in the years after the financial crisis. firstly, the internal statistical models of the big banks had been shrouded in too much mystery. secondly, the standard methods used by the small and medium - sized institutions weren't precise enough. these are some of the new and old challenges that the basel committee and the european commission intend to address with the last part of the rules. i think that the proposal contains several good elements. here, there is no getting around mentioning the output floor. that is the lower limit for how low large banks can set their risk assessment – and that regardless of how small the risks are according to their internal statistical models. the prospects of a new floor requirement and higher capital adequacy requirements for mortgage lending have made the whole danish financial sector sit up and take notice, prepared to advocate alternative solutions. we have also been skeptical about the need for the output floor. but it's time to move on. the output floor has been long in the making. it replaces an old and an even more incomprehensible floor requirement. the european commission has also adjusted the floor requirement to a european reality with several relaxations relative to the original proposal from basel. we've previously seen some imaginative calculations of what the output floor will cost in denmark's gdp accounts. let me first stress that capital is not an expense. it's a source of funding of a bank's activities that can cushion a bank before the crisis hits. of course, many of you here are well aware of this, but i think you have been quite reluctant to share this knowledge with the general public in recent years. in danmarks nationalbank, we cannot arrive at the same results as in these calculations. our calculations show that the revised output floor proposed by the commission can be expected to lead to a relatively modest increase in the capital adequacy requirements for some large banks and mortgage credit institutions, while others may not be affected at all. when we subsequently insert these increases in our macroeconomic models, we must conclude that the pass - through to the danish economy is very limited. page 6 of 7 on the

relatively low energy prices on the global markets an increase in food supply driven by higher productivity in agriculture. the nbu has also performed scheduled revisions of other macroeconomic forecasts 1 / 3 bis central bankers'speeches the nbu has revised its economic growth forecast upwards, to 3. 5 % in 2019 – 2020 and 4 % in 2021. the revision was driven by the sustained domestic demand, higher productivity in agriculture, and improved consumer sentiment. in the meantime, slower growth in the global economy and worsened terms of trade will weigh on economic growth in 2020. the 2019 – 2021 current account deficit will remain acceptable. in particular, it will narrow to 2. 9 % of gdp this year despite the stronger hryvnia. that will be driven by an improvement in the terms of trade and the rich grain harvest. conversely, the current account deficit will widen slightly in the years to come, as a result of a decrease in gas transit and less favorable global commodity prices. in particular, the nbu expects somewhat lower iron ore prices and higher energy prices. what does the realization of the said macroeconomic forecast depend on? further cooperation with the international monetary fund remains the basic assumption of the macroeconomic forecast. the current nbu forecast assumes a new imf cooperation program will be approved by the end of 2019. this will allow ukraine to attract other official financing, improve the conditions of access to the international capital markets, and support the interest of investors in ukrainian assets. as a result, notwithstanding large external debt repayments, international reserves will range at around usd 23 – 24 billion in the coming years, which is sufficient to cover three months of future imports. the nbu currently sees two key risks to the above macroeconomic forecast, and in particular to inflation decreasing to its target in 2020. the first risk is a delay in signing a new program with the imf. the second risk is about increasing threats to macrofinancial stability, mainly due to ukrainian court rulings. if materialized, these risks could worsen exchange rate and inflation expectations, and make it harder for ukraine to access the international capital markets in order to repay a heavy debt load in the coming years. the following risks also remain important : a complete halt of the transit of russian gas through ukraine intensified trade tensions and more turbulent global financial markets an escalation of the military conflict and new trade restrictions introduced by russia. why, given the said risks, did the nbu cut the key policy rate by 1 pp? although still