april, danmarks nationalbank was able to lower its discount rate to 1. 75 per cent – the lowest level since the establishment of danmarks nationalbank in 1818. although the lending rate is slightly higher, the short - term interest rate is historically low. long - term interest rates have decreased less than policy rates. the central banks of several countries, including the uk and the usa, are buying back bonds to force down long - term interest rates in order to stimulate the economy. it remains to be seen whether the european central bank will steer a similar course. if it does, long - term interest rates in denmark could also be affected. it is essential that the current extraordinary stimulus measures do not increase long - term inflationary expectations as this would create problems for the economy in the longer term as a result of measures to mitigate the current crisis. thanks to the low policy rates, the banks can borrow from danmarks nationalbank at low cost. but danmarks nationalbank is by no means the only source of financing for danish banks. the financial crisis has generally made it more difficult for the banks to obtain financing in the international money and financial markets. this has entailed higher financing costs. the importance of the international money markets as a source of financing has grown over the last 10 years as growth in the banks'deposits has lagged behind growth in lending. the higher financing costs have been passed on to the banks'customers. since last autumn, the banks have again reduced their interest rates somewhat. the decline in deposit rates has more or less mirrored the reduction in policy rates, while lending rates for households and the corporate sector have declined a little less. the result is higher interest margins for the banks, at a time when losses are expected to increase for a period to come. in addition, the banks'contribution to the financing of the government guarantee under bank rescue package i will amount to kr. 35 billion. danmarks nationalbank's interest rates are guidelines for the banks'interest rates, but a one - to - one relation should not be expected. the credit terms for bank and mortgage customers have been tightened further since last autumn. this is evident from danmarks nationalbank's latest bank lending survey. the tightening has been most pronounced for corporate loans. in the survey, the respondents give the more gloomy risk outlook as the main reason. the risks have proved to be greater that the institutions expected three months ago. the mortgage - credit institutes also state the supplementary

strongly than last year, but slightly less than in the rest of the eu. nevertheless, unemployment is expected to continue to increase for some time as it typically lags behind demand. no one can say for certain how long the increase will continue and how strong it will be. any calculations we make will have a considerable element of uncertainty. according to the latest estimate, unemployment will not peak until early 2011 at around 190, 000 persons. denmark can use economic policy to mitigate the mounting crisis, but we cannot avoid it – no matter what we do. we have already launched significant measures to stimulate private consumption and activity in the building and construction sector. fiscal policy is expansionary and has been so for several years. danmarks nationalbank's policy rates are historically low. we are running out of room to manoeuvre. we cannot force consumers to spend more. in the worst case, consumers will save up and then spend the money at a time when it would be more appropriate for them to tighten the reins. if we cut to the chase, it is a question of how much we can use the building and construction sector as a cyclical regulator to create jobs as compensation for falling employment in other sectors – exports, trade, services and the financial sector. we are saying : wait a moment and let us see how the measures already implemented work. after all, capacity in building and construction is limited. only recently, the sector was in full alert with overheating and shortage of craftsmen, while prices and wages were rising. if we overburden the building and construction sector again, history will repeat itself and that could ultimately exacerbate the crisis. finally, the contribution to an overall reduction in unemployment will be limited in any case. and i have not even mentioned the difficulties of ensuring rational planning of building or construction projects moved forward or subsidy schemes that stimulate initiation of projects. indeed, the crux of the matter here is job creation and not what can be done to mitigate the consequences for the unemployed. efforts should be directed at retaining and developing competencies, for example, and an extraordinary effort is required to create more places in education and training. * * * during the last six months of financial turbulence, the mortgage system has proved that it can ensure financing of real property. market confidence in the danish mortgage system has been upheld, against the backdrop of mounting difficulties in financing real property in many other countries. monetary policy has been relaxed all over the world. on 3