Danish National Bank
| Headquarters | Copenhagen , Denmark |
| founding | August 1, 1818 |
| president | Nils Bernstein |
| country | Denmark |
| currency | |
| ISO 4217 | DKK |
| Website | |
| List of central banks | |
The Danish National Bank ( Danish : Danmarks Nationalbank or National Banks for short ) is the central bank of Denmark . It is a member of the European System of Central Banks . Since Denmark is not a member of the euro zone , the bank is responsible for issuing the national currency, the Danish krone . She is responsible for monetary and currency policy. The Danish currency has been linked to the euro as the reserve currency since 1999 via the Exchange Rate Mechanism II . It was founded as a private banking institute on August 1st, 1818 by King Friedrich VI. Their independence was enshrined in law in 1936.
history
founding
In 1736 the first bank in Denmark was established to support the business sector. It was " Den Københavnske Assignations-, Veksel- og Lånebank ", called Kurantbank . The Kurant banknotes, denominated in Danish imperial talers ("Rigsdaler courant"), were initially issued against silver coins, i. H. against actual Kurantgeld . However, the Kurantbank issued more notes than it could cover with silver coins . The main reason for this was the granting of unsecured loans to the Danish state. Because the obligation to redeem banknotes for silver could not be met, the obligation to redeem banknotes for silver coins was abolished in 1757. At the same time, the so-called Kurant notes became mandatory as legal tender, even though they were pure paper money . The loss of confidence in the Kurantbank and the banknotes it issued laid the foundation for the founding of Den dansk-norske Speciesbank in 1791 . It was given the monopoly of issuing notes for the dual state Denmark-Norway . A few years later, Denmark experienced high inflation due to the Napoleonic Wars (1807–1814). Once again, the Danish state tried to cover its expenses by issuing unsecured banknotes from Kurantbank. The subsequent state bankruptcy led to monetary union in 1813, which inevitably also included the duchies of Schleswig and Holstein , which were largely independent in currency matters. A new central bank - the Rigsbank - was founded. The exchange ratio of banknotes of the old currency ( Kurantrigsdaler ) for those of the new currency ( Rigsbankdaler ) was 6: 1.
On August 1, 1818, King Friedrich VI. the National Bank in Copenhagen ( Nationalbanken i Kjøbenhavn ) as a private banking institution. The king gave her the monopoly on the issue of the crown for an initial 90 years. Their ultimate goal was to restore the monetary system. This goal was achieved as early as 1830. Between 1840 and 1870 the importance of savings banks and private banks increased. The development of the banking industry was particularly positive in the agricultural sector. The National Bank was now able to concentrate more on its role as a central bank. When Denmark joined the Scandinavian Coin Union in 1873, the silver standard introduced in 1845 was replaced by the gold standard and a common currency ( krona in Sweden and Norway, krona in Denmark) was adopted.
Denmark and Sweden signed the Scandinavian Coin Union (SMU) treaty on May 27, 1873 . Norway did not join the SMU until 1877. With the monetary union, the decimal system and the common currency were introduced. The contract for the SMU contained an exit clause with a notice period of one year. Each country kept its own central bank ( Riksbank in Sweden, National Banks in Denmark, Norges Bank in Norway). For monitoring purposes, the countries agreed on an annual obligation to inform the member states about all monetary policy activities.
In addition to gold coins, each country initially minted its own coins in silver and bronze. The different names and weight were regulated in the SMU contract. Only gold coins and the various divisional coins were accepted as means of payment within the SMU, with the exception of banknotes. Sweden has accepted the banknotes of the member countries with the same denomination since joining the SMU in 1873. However, this was formally contractually agreed between Sweden and Norway in 1894. In 1901 Denmark signed such an agreement with Sweden. In 1905 the political union Sweden-Norway broke up . The agreements to accept means of payment at the same face value also lapsed.
First and Second World War (1914–1945)
With the outbreak of the First World War in 1914, the Scandinavian monetary union began to collapse. As the gold reserves decreased, the three central banks suspended the exchangeability of gold. In addition, an export ban on gold was imposed. This ban not only overruled the stability of exchange rates between gold standard countries, but also their function of monetary policy. In 1921 the gold standard was lifted and the three countries finally left the SMU. The gold standard was reintroduced in Denmark as early as 1924. Inflation and crises made it difficult to bring gold and currency to the same face value (gold parity). Therefore, a currency law ( Valutaloven fra 1924 ) was passed with the aim of restoring gold parity. This was achieved in 1926, but was bought at the cost of deflation and a high unemployment rate of over 20 percent. The gold standard didn't last long. The global economic crisis in 1929 led to the renewed suspension of the gold standard and to its final abandonment in 1931.
Shortly before Denmark was occupied by German troops in 1940, the National Bank brought its gold reserves to New York . They stayed there throughout the war. Today a large part of the gold is stored at the Bank of England in London. During the occupation (1940 to 1945) Denmark was obliged to finance the occupation costs. As a result, the money supply rose sharply and led to an appreciation of the krona by 8% in 1942. In 1944 Denmark joined the International Monetary Fund (IMF) and participated in the Bretton Woods fixed exchange rate system . After the war, the primary goal was to contain inflation and reduce the money supply. On July 23, 1945, old banknotes were exchanged for new ones. This day was also known as the “asset control day” ( formuekontroldag ).
Post-war period until 2002
In 1967 the National Bank ceased its function of lending to the private sector. During this time the problems with the Bretton Woods system worsened. In 1971, the United States decided to decouple the dollar from gold, which led to the end of the Bretton Woods system in 1973. The Danish krone has not been subject to a fixed exchange rate since then. With the European Monetary System (EMS) in 1979, the exchange rate mechanism I was introduced in Denmark . The introduction of the euro on January 1, 1999 led to Exchange Rate Mechanism II for the EU countries that are not (yet) members of the monetary union. On September 28, 2000, Danish voters rejected the introduction of the euro in a referendum with 53.1% of the vote. The krona remains pegged to the euro via ERM II.
organization
The organizational structure of the bank is regulated by the National Bank Act. The management bodies of the Danish National Bank are the management with three members, the board of directors ( bestyrelse ) with seven members and the board of directors ( repræsentantskab ) with 25 members.
Directorate
The management consists of three members. You are responsible for the monetary policy of the Danish National Bank.
| Surname | Taking office | function |
|---|---|---|
| Lars Rohde | 2013 | president |
| Per Callesen | 2011 | director |
| Hugo Frey Jensen | 2011 | director |
| Surname | Term of office | Surname | Term of office |
|---|---|---|---|
| J. Winther | 1907-1924 | Ove Jepsen | 1935-1955 |
| JH Lauridsen | 1909-1920 | H. Haugen-Johansen | 1939-1957 |
| Marcus Rubin | 1913-1923 | Holger Koed | 1949-1950 |
| Westy Stephensen | 1913-1939 | Svend Nielsen | 1950-1964 |
| C. Ussing | 1914-1924 | S. Hartogsohn | 1956-1963 |
| JP Dalsgaard | 1920-1923 | Frede Sunesen | 1957-1979 |
| H. Green | 1923-1931 | Svend Andersen | 1963-1982 |
| HCO Rosenkrantz | 1923-1935 | Erik Hoffmeyer | 1965-1994 |
| J.Kr. Lindberg | 1924-1932 | Ole Thomasen | 1980-1996 |
| F. Schrøder | 1925-1936 | Richard Mikkelsen | 1982-1990 |
| CV Bramsnæs | 1933-1949 | Bodil Nyboe Andersen | 1990-2005 |
| Nils Bernstein | 2005-2013 | ||
| Lars Rohde | since 2013 |
Board
The board consists of seven members. Two members are appointed from the Board of Directors by the Minister for Economic Affairs. In the selection of the remaining five members, one is appointed from the government parliamentary groups and another from the opposition. The board of directors usually meets ten times a year and performs organizational tasks. He is also responsible for auditing the annual accounts of the Danish National Bank. Søren Bjerre-Nielsen has been the chairman of the board since December 6, 2011 , and Michael Dithmer is his deputy.
Board of Directors
The Board of Directors has 25 members. Eight of them are elected by the Danish Parliament Folketing from among its members. Two are appointed by the Minister of Economic Affairs. The other 15 members are recruited based on their expertise, e.g. B. Management of companies, elected by the board of directors (three per year). They should come from different parts of the country and from different professions. The involvement of employee representatives is also planned, so that the committee also includes three union officials. Meetings take place once a quarter. The Board of Directors also performs organizational tasks and approves the annual financial statements of the Danish National Bank. Søren Bjerre-Nielsen is currently Chairman of the Board of Directors and Helle Bechgaard is Vice-Chair.
goals and tasks
The National Bank of Denmark has three main objectives under the law. The first goal is to maintain price stability . This is followed by a fixed exchange rate policy. The second goal is to ensure secure payment transactions . This includes the issue of banknotes and coins as well as the processing of payment transactions with cash and electronic payments. The third goal is to maintain monetary stability . It does this by assessing financial stability, overseeing payment systems, compiling statistics, and the government's financial management of borrowing and debt management. The Danish National Bank is independent of the Danish government in its monetary policy. However, it must inform the government about the change in interest rates. The decisions, however, lie solely with the management.
Monetary policy
There is a clear division of responsibilities between the Danish National Bank and the Danish government with regard to economic policy . The Danish government and parliament are responsible for financial policy and economic policy in general. The Danish National Bank is independent from the government and is responsible for monetary policy, which is intended to ensure the stability of the krona against the euro. It is mainly controlled by changing interest rates. The main goal of changing interest rates is to support the fixed exchange rate. Most of the time, the Danish National Bank changes its interest rates based on the key interest rate change of the European Central Bank ( ECB ). In troubled situations, the Danish National Bank can intervene to keep the krona at the central rate . This happens primarily through interventions in the foreign exchange market (buying and selling foreign currency or government bonds), most recently through the adjustment of interest rates. Since the euro referendum, the Danish National Bank has adjusted interest rates in parallel with the ECB.
Exchange rate policy
Denmark's economy was in bad shape in the late 1970s and early 1980s. Unemployment rose to ten percent. The inflation rate was around ten percent annually. The budget deficit corresponded to almost ten percent of the gross domestic product. Long-term government bond yields were over 20%. In addition, the current account showed a chronic deficit. This is why Denmark opted for the fixed exchange rate strategy . From 1979 to 1981 the krona was devalued by around 20% against the D-Mark . A short time later, in September 1982, the new government announced that it would not adjust the exchange rate. Since then, devaluations and inflation expectations have been lowered. In addition, the long-term yield difference to Germany fell from 13% in 1982 to less than 1 percent in 1991. Up until 1990 the inflation rate was similar to that in Germany and the current account showed a surplus for the first time in more than 25 years.
The current policy of the fixed exchange rate of the krona against the euro is based on the exchange rate mechanism II (ERM II). Denmark participates in a central rate of 7.46038 Danish kroner (DKK) per euro and an agreed range of ± 2.25%. The exchange rate could therefore fluctuate between DKK 7.29252 and DKK 7.62824 per euro . By buying and selling foreign currency and government bonds, the Danish National Bank can influence the value of the krona. As part of ERM II, the European Central Bank (ECB) can also intervene to provide support if the agreed range of ± 2.25% and the central rate cannot be adhered to. This was not necessary at the Danish National Bank until 2014, the krone stayed close to the central rate. Since the krona tended to trade stronger than the euro, the euro is supported by the sale / issue of kroner (see Swiss francs ).
As a result of the exchange rate crisis of the Swiss franc, the Danish National Bank tried in January 2015 to keep the exchange rate from krone to euro stable by trying to curb the inflow of foreign capital. In initially three steps, it lowered the interest rate on deposits at the National Bank to minus 0.5 percent. Two reductions were made on January 19 and 22, and the third by 0.15 percentage points on January 30. At the same time, the issue of government bonds was discontinued. A continuation of the stability policy with further measures is considered likely.
Manufacture of banknotes and coins
In 1739 the Royal Danish Mint became independent from the state. When absolute monarchy was abolished in 1849, the management of the Royal Danish Mint was transferred to the Ministry of Finance and the Ministry of Economics. The Danish National Bank took over the mint in 1975. Since then it has had a monopoly on the production and issue of Danish banknotes and coins. Subject to the approval of the Minister for Economic Affairs, the Danish National Bank determines the appearance of banknotes, coins and their names. Coins are produced in the mint in Brøndby (near Copenhagen). The banknotes are printed in the Danish National Bank building in central Copenhagen . Production is adjusted as needed, taking into account the differences in the lifespan of small and large notes. The lifespan of a 50-kroner banknote is usually one and a half years, while the 1000-kroner banknote is in circulation for an average of five years. Banks in Denmark, the Faroe Islands and Greenland are supplied with banknotes and coins as required .
Payment systems
The Danish financial system includes banks, mortgage and credit institutions as well as insurance and pension funds. The Danish National Bank plays an essential role in the processing of payments between banks. It is the "bank of the banks". Transfer payments between banks are made through the accounts of the National Bank of Denmark. Denmark has different payment systems for processing payments. The payments that the individual banks owe each other can be seen in so-called netting systems. There are three netting systems. Credit card payments ( Dankort ), checks and direct debits ( BetalingsService ) are processed with Sumclearing . The VP system is related to payments in securities transactions, mostly stocks and bonds. FUTOP handles payments related to trading futures and options. The two largest netting systems (Sumclearing and VP) handle trading and securities trading as well as bulk payments in Denmark. Sumclearing processes payments via credit cards, direct debit payments and checks. VP handles payments through securities deals, typically stocks and bonds. The transactions are processed with the bank's own system of the Danish national bank KRONOS or the TARGET2 from the Eurosystem. KRONOS acts as the home banking system for banks in Denmark. TARGET2 refers to euro payments between the Danish banks and the banks in the other EU member states.
Like many other central banks, the Danish National Bank is responsible for assessing whether the systems meet the requirements. The supervision relates to both the bank's own KRONOS system and the two largest netting systems (sum clearing and VP). The Danish National Bank oversees the important electronic payment and securities settlement systems with the oversight monitoring system. The monitoring focuses on the security and efficiency of the systems. In particular, it is about limiting the negative effects of mistakes. These systems are operated and monitored separately. The assessment is based on international standards. In addition, the monitoring system is based on the Danish Securities Trading Act (WpHG).
Finance and Risk Management
The risks in the payment and securities settlement systems are systematically monitored with Oversight. The primary goal is to promote the smooth operation of the systems by contributing to stability and efficiency. The role of the Danish National Bank includes oversighting these payment and securities settlement systems against internationally recognized standards and recommendations. Aspects such as consumer protection and competition do not play a role here. In addition, the Danish National Bank also ensures that the international requirements of its bank's own KRONOS system are met. The Danish National Bank manages the risk of the currency reserve and the bond portfolios. In doing so, it must take into account financial risks such as fluctuations in interest rates and exchange rates and operational risks such as the risk of financial losses. Financial risk management is subject to formalized decision-making processes. This is to ensure a clear division of responsibility. Risk management and portfolio management should be in line with the applicable international guidelines of the International Monetary Fund. Operational risk management includes analyzes of various risk scenarios, ongoing management of reporting on potential threats and incidents, and assessments of compliance with the model's requirements within the company.
International cooperation
The Danish National Bank is part of the European System of Central Banks (ESCB). The ESCB comprises the European Central Bank (ECB) and the central banks of the 27 EU member states. Eleven EU member states (Bulgaria, the Czech Republic, Denmark, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Sweden, Great Britain) have not yet introduced the euro. With the exception of Denmark and the UK, the other Member States are required to adopt the euro over time. The central banks of the eleven EU member states that have not introduced the euro are only active in the General Council. The General Council discusses the economic situation and monitors the Exchange Rate Mechanism II. Denmark is also active in various ECB committees. The International Monetary Fund (IMF) aims to promote trade and economic growth. The Danish National Bank and the Ministry of the Economy work with the IMF. The National Bank President represents Denmark in the top decision-making level of the IMF, the Board of Directors.
Debt management
The Danish National Bank and the Ministry of Finance are jointly responsible for managing the national debt. The National Bank takes on the administrative tasks. The Treasury Department is responsible for borrowing and debt management, including relations with the national parliament. The overall strategy for borrowing and debt management is determined in quarterly meetings between the Ministry of Finance and the National Bank. The National Bank takes on ongoing borrowing and debt management in accordance with the established strategy. Borrowing takes place through the issue of government bonds on the Copenhagen Stock Exchange and through borrowing abroad.
building
The building was designed by Arne Jacobsen in 1965 . The construction work was taken over by Dissing + Weitling after his death (1971) and ended in 1978. The construction phase began with the establishment of the money printing facility in the basement of the building. The architecture of the building follows the formal language of functionalism without frills and decorations, as Jacobsen showed it internationally at the end of his creative period. The facade design with gray marble slabs and black facade elements was also used for the Mainz town hall , which he designed in 1966.
The current main building is located in downtown Copenhagen on a plot between Niels Juels Gade , Holbergsgade and Bremerholm . The property is bordered to the south by the Holmens Canal . The Holmens Kirke is located on the neighboring property to the west. In addition to its headquarters in Copenhagen, the National Bank had several branches. In 1837 the first branch opened in Aarhus . Further branches were in Ålborg , Nykøbing Falster , Odense , Kolding and in Flensburg , which came to Germany after the German-Danish War in 1864. All were closed again between 1939 and 1989. From 1870 the National Bank resided in a building built by Johan Daniel Herholdt on the Holmens Canal from 1865 to 1870 in the Renaissance style that was widespread at the time .
Web links
- Danish National Bank (Danish / English)
Individual evidence
- ↑ a b c d National Banks - Historical snapshots ( Memento from June 1, 2013 in the Internet Archive ) www.nationalbanken.dk.
- ↑ U. Michael Bergman: Do Monetary Unions Make Economic Sense? Evidence from the Scandinavian Currency Union, 1873-1913. In: The Scandinavian Journal of Economics , Volume 101, No. 3 (Sep., 1999), pp. 363-377. jstor .
- ↑ http://www.nationalbanken.dk : Danmarks Nationalbank's gold sent to the USA ( Memento from March 20, 2012 in the Internet Archive ) (English)
- ↑ a b c National Banks - Organization www.nationalbanken.dk, accessed on November 4, 2014.
- ↑ National Banks - Objectives www.nationalbanken.dk, accessed on November 4, 2014.
- ↑ National Banks - Monetary Policy ( Memento of December 22, 2005 in the Internet Archive ) www.nationalbanken.dk, accessed on: May 16, 2010.
- ↑ Nationalbanken - The Tasks of Danmarks Nationalbank 2008 ( Memento of 16 May 2013 in the Internet Archive ) (PDF; 1.9 MB), p. 14.
- ↑ National Banks - Monetary Policy in Denmark, 3rd edition (2009) ( Memento from May 16, 2013 in the Internet Archive ) (PDF; 908 kB) p. 11.
- ↑ Nationalbanken - The Tasks of Danmarks Nationalbank 2008 ( Memento of 16 May 2013 in the Internet Archive ) (PDF; 1.9 MB) www.nationalbanken.dk, pp. 12-13.
- ↑ ROUNDUP: Denmark is fighting with interest rate cut to peg to the euro. FAZ , January 29, 2015, archived from the original on February 2, 2015 .
- ↑ National Banks - Banknotes and Coins www.nationalbanken.dk, accessed on November 4, 2014.
- ↑ Nationalbanken - The Tasks of Danmarks Nationalbank 2008 ( Memento of 16 May 2013 in the Internet Archive ) (PDF; 1.9 MB) www.nationalbanken.dk, p. 17.
- ↑ Nationalbanken - The Tasks of Danmarks Nationalbank 2008 ( Memento of 16 May 2013 in the Internet Archive ) (PDF; 1.9 MB) www.nationalbanken.dk, p. 24.
- ↑ Nationalbanken - Banking and payments www.nationalbanken.dk, accessed on November 4, 2014.
- ↑ Nationalbanken - Financial and operational risk management www.nationalbanken.dk, accessed on November 4, 2014.
- ↑ Nationalbanken - The Tasks of Danmarks Nationalbank 2008 ( Memento of 16 May 2013 in the Internet Archive ) (PDF; 1.9 MB) www.nationalbanken.dk, p. 9.
- ↑ National Banks - International cooperation www.nationalbanken.dk, accessed on November 4, 2014.
- ↑ Nationalbanken - Government debt management ( Memento of March 24, 2012 in the Internet Archive ) www.nationalbanken.dk, accessed on May 16, 2010.
Coordinates: 55 ° 40 ′ 36 ″ N , 12 ° 35 ′ 9 ″ E