speech by governor lars rohde at the 200th anniversary of danmarks nationalbank in 2018 check against delivery 4 july 2018 your majesty. dear guests. danmarks nationalbank was established 200 years ago. just across the canal from here. danmarks nationalbank's main building was located in what is now slotsholmsgade. it had simply been built across the middle of the street. you could not avoid it. seen from danmarks nationalbank's perspective, its position made good sense. on one side was the " red building ", which even back then housed the ministry of finance. on the other side, the bank was joined to christian iv's old stock exchange. the newly established central bank was a large enterprise. it had around 50 employees. but it also had an important task. the danish economy was in a state of chaos. it had to be sorted out. inflation was soaring when the war ended. it had to be reduced. there was widespread lack of trust. trust had to be restored. but how had this situation arisen? page 1 of 9 the british bombardment of copenhagen. the state bankruptcy. we remember these events from our history lessons. denmark had been at war. that was expensive. we had lost. that made matters even worse. enormous government budget deficits had been financed by printing more money. prices of staples – grain, butter and meat – rose by more than 300 per cent in one year. in recent times, this has been surpassed only in countries such as venezuela and zimbabwe. and who are the greatest losers when the economy is in a shambles? ordinary people. there was every reason to establish a central bank. tasked with ensuring that the value of money remains stable. so that people know what their wages are worth. that they can trust the country's means of payment. and save or borrow money when they need it. * * * trust in the value of money is a cornerstone of all societies at all times. to illustrate that, let me tell you a little story from my own family's past. not because i imagine that my family's history is special. but precisely because it is so ordinary. many of you could probably tell similar stories. if not, you should talk to your older family members while you still have the chance. my paternal grandfather had a market garden near the town of skive. he and my grandmother had 13 children. that was not unusual back then. she was considerably younger than

been given additional resources and powers. the crisis revealed various weaknesses, and they have been addressed. but as we have seen previously, pressures to ease the rules will emerge at some point. personally, i am rather surprised to see what is happening in denmark. the bank rescue packages enjoyed broad political support and until recently they had a clear aim : a financial crisis – never again! the time had come to tidy up and tighten the rules. however, winds of change seem to be sweeping across the political landscape. has the danish financial supervisory authority now been given too much power, and have the requirements imposed on mortgage banks become too tight? it is as if the financial crisis has already been forgotten. but i would be surprised if our collective political memory is that short. if so, it would be shorter than in other european countries. so i would like to remind you that in denmark we provided massive support during the financial crisis, and the government took on huge risks on behalf of the tax - payers. under bank rescue package 1, the government provided guarantees for an astronomical kr. 4, 200 billion. with bank rescue package 2, the government gave the financial sector a capital injection of kr. 46 billion in order to prevent a potential credit crunch, and it guaranteed debt issuances of kr. 194 billion. on the fifth anniversary of the introduction of the general government guarantee, the government has still injected capital totalling kr. 31 billion into the sector. so far, the government has not had any direct costs that have not been covered by the sector ’ s payments for this support, but the risk has been enormous. in that perspective there can be no doubt that there was a need for tightening. yes, we have come a long way in terms of tidying up, but it would be unfortunate if the pendulum has already begun to swing back. thank you for inviting me to speak. bis central bankers ’ speeches