bail - in before using resolution funds and public credit lines is very strong. 8 per cent of all assets often compares to 25 – 30 per cent of risk - weighted assets. the resolution mechanism will also work as an insurance scheme in case of even graver systemic events. this is helpful, provided it is based on sound principles. the ecb is currently performing an asset quality review of the largest banks of the euro area, and is preparing an ensuing stress test. the danish supervisor will perform a similar review of the largest danish credit institutions. obviously, any legacy problems unearthed by the aqr and stress tests have to be dealt with before any joint insurance element of banking union will come into play. the ecb has strong incentives to safeguard the success of the aqr and be a strong and hands - on supervisor. legacy issues are not a particular dividing line between countries in or out of the euro zone, but something being a matter for all possible participants in the banking union. there are still issues and details to be decided and dealt with, but we should work towards the success of the banking union, and as mentioned, we believe that denmark should continue to engage strongly with a view to participating when appropriate. thank you for your attention. i am happy to take any questions. bis central bankers ’ speeches

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