will continue to stress to the region ’ s bankers that a financial institution ’ s decision to assume certain types of risk is a decision for the board of directors and senior management. also, as supervisors, we will continue to expect to see the appropriate level of risk management in place to manage and mitigate the risks assumed. this means having the appropriate expertise on the management team, robust information systems and technologies to monitor and manage those risks, proper controls and oversight, reasonable limits, and an action plan to take corrective measures when necessary. all business decisions have risks and there must be mitigating strategies in place to manage adverse occurrences. hearing your input and perspectives on these issues is an important part of the process for us, and i am fortunate to have the opportunity to meet with many community bankers in the second district. some of the most common themes i hear include : an appreciation for the recent regulatory reforms implemented such as the streamlining of the call report ; the extension of the examination cycle to 18 - month for firms under $ 3 billion in total asset - size ; and the current discussions around capital simplification. the comment period on capital simplification will close on april 9th, and i hope you all shared input to influence that important policy decision. 1 / 3 bis central bankers'speeches one area where we receive mixed feedback from bankers is the issue of off - site examinations. some bankers love that idea, while others have stated they like the face - to - face interaction as it reduces the risk of miscommunication, misinterpretations or ambiguities. still others prefer a hybrid approach with certain portions of examination work conducted on - site and others off - site. all felt critical meetings should be conducted in person. today ’ s technology makes all of these options possible, and we will continue to exercise judgment and thoughtful communication with bankers to determine the best option. at the end of the day, our shared goal is a fair and accurate assessment for your institution, and we will continue to work together to accomplish this. turning to today ’ s conference theme of “ on the horizon for community banking, ” i have a few observations that i ’ d like to share. these observations, in part, preview the day ’ s agenda and i look forward to the continued conversation on these important issues. first, our country and the banking industry have benefitted from steady economic growth, modest inflation, and low unemployment in recent years. these are all positive and welcome outcome

nils bernstein : the danish economy in an international perspective speech by mr nils bernstein, governor of the national bank of denmark, at the annual general meeting of the association of dlr kredit, copenhagen, 25 april 2007. * * * thank you for the invitation to speak here today. my subject today is the danish economy in an international perspective. i will first present some views on globalisation, and then turn to the internationalisation of the financial markets. finally, i will consider some of the financial products that have come to us from abroad and today are offered to private danish investors. the danish economy has traditionally been internationally oriented, with considerable external trade. agriculture became globalised more than 100 years ago. much of our prosperity is a consequence of the international division of labour. the current development has made this international perspective even more relevant. globally, there is an ever - increasing international exchange of goods and services, investments, information, people, culinary habits, culture, etc. the economic changes have been extensive and help to explain why globalisation is currently a major topic of debate. * * * globalisation has developed in waves of shorter or longer duration over the last few centuries. especially in the golden eras, there was major technological progress within transport and communication. these eras were also characterised by an international political environment that stimulated free trade and the unrestricted mobility of capital and people. in current years, globalisation seems to have even more wind in its sails. populous nations such as china and india have become part of the global market economy. technological progress in e. g. the it area has fundamentally changed how companies organise their production set - ups. the free movement of capital has probably never enjoyed better conditions than those prevailing today. these changes have increased the benefits from the international division of labour. lowtechnological production has moved to the countries whose labour - intensive production gives them a comparative advantage. production in more developed countries has become further concentrated around high - tech products. at the same time, the outsourcing of services, rather than just the production of goods, has been increasing rapidly. today, cross - border trade in services accounts for 20 per cent of world trade. one indicator of the growing economic integration between different countries is that world trade is expanding faster than global output measured by gdp ( slide 2 ). this has been the case without any interruption since the second world war. compared to other industrial countries, the danish economy has enjoyed double globalisation gains. denmark's export