Danmarks Nationalbank Report and Accounts
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Danmarks Nationalbank Report andAccounts 2001 Danmarks Nationalbank Report and Accounts 01 Danmarks Nationalbank Havnegade 5 DK-1093 Copenhagen K DA N M A R K S Telephone +45 33 63 63 63 Fax +45 33 63 71 03 NA T I O N A L www.nationalbanken.dk E-mail: [email protected] BANK2001 UK-2001.pmd 1 28-02-2002, 12:57 1 Danmarks Nationalbank Report and Accounts 2001 2 The small picture on the front cover is a characteristic view of the Danmarks National- bank building at Havnegade 5 in Copenhagen. The building dates from 1965-78 and was designed by the architect Arne Jacobsen (1902-71). The Annual Report is available on request from: Danmarks Nationalbank, Information Desk, Havnegade 5, DK-1093 Copenhagen K Telephone: +45 33 63 70 00 (direct) or +45 33 63 63 63 E-mail: [email protected] The Annual Report is available on Danmarks Nationalbank's Web site: www.nationalbanken.dk under Publications Office hours: Cashier services: Monday-Friday 10.00 a.m.-1.00 p.m. Other enquiries: Monday-Friday 9.00 a.m.-4.00 p.m. Explanation of symbols: - Magnitude nil 0 Less than one half of unit employed • Category not applicable … Data not available Detail may not add because of rounding. SCANPRINT A/S, VIBY J ISSN 1397-520x ISSN (Online) 1398-3849 3 Contents FOREWORD ........................................................................................... 9 REPORT OF THE BOARD OF GOVERNORS Summary ............................................................................................... 13 THE DANISH ECONOMY International background .................................................................... 17 Economic activity in Denmark ............................................................. 20 Balance of payments ............................................................................ 23 Credit expansion ................................................................................... 24 Wage and price trends ......................................................................... 25 Economic prospects .............................................................................. 27 MONETARY AND EXCHANGE-RATE POLICY The fixed-exchange-rate policy ........................................................... 29 Monetary policy and the short-term interest rates ............................ 31 Capital flows and the foreign-exchange reserve ............................... 36 FINANCIAL MARKETS Interest rates ......................................................................................... 39 Foreign-exchange markets .................................................................. 45 Stock markets ........................................................................................ 47 THE DOMESTIC FINANCIAL SYSTEM The banks .............................................................................................. 51 The mortgage-credit institutes ............................................................ 52 Investment associations ....................................................................... 53 The bond market .................................................................................. 54 Statutory framework for the financial sector .................................... 56 New regulations in the stock-exchange area ..................................... 59 VB Finans and Himmerlandsbanken ................................................... 60 BANKNOTES AND COINS Banknotes and coins in circulation ...................................................... 62 4 New portrait of the Queen on the 10- and 20-krone coins ............... 64 New Faroese banknote series .............................................................. 65 Counterfeiting ...................................................................................... 65 PAYMENT SYSTEMS Kronos ................................................................................................... 67 Krone payment systems ....................................................................... 68 Euro payment systems .......................................................................... 69 Oversight ............................................................................................... 70 International work on payment systems ............................................ 73 Developing the payments infrastructure ............................................ 73 INTERNATIONAL MONETARY COOPERATION The changeover to euro banknotes and coins ................................... 75 Non-participating EU member states and the candidate countries .. 76 The economic policy guidelines of the EU .......................................... 79 The International Monetary Fund, IMF ............................................... 82 ORGANISATION AND TASKS OF DANMARKS NATIONALBANK Danmarks Nationalbank's objectives and values ............................... 88 Danmarks Nationalbank's management ............................................ 89 Departments ......................................................................................... 92 Staff ....................................................................................................... 96 Representation on committees, etc. ................................................... 98 Representation in international organisations .................................. 99 Danmarks Nationalbank's Anniversary Foundation of 1968 ............. 101 Danmarks Nationalbank's guest apartments at Nyhavn 18 .............. 102 The Erik Hoffmeyer Travel Grant Foundation..................................... 102 REPORT ON DANMARKS NATIONALBANK'S ACCOUNTS Danmarks Nationalbank's management of financial risks ................ 103 Presentation of Danmarks Nationalbank's accounts ......................... 109 ACCOUNTS DANMARKS NATIONALBANK'S ACCOUNTS FOR THE YEAR 2001 .... 115 APPENDIX Press releases ......................................................................................... 130 The Statutory Basis for the Financial Sector ....................................... 143 5 Danmarks Nationalbank's comments on the January 2001 consultative document "The New Basel Capital Accord" ................. 151 APPENDIX OF TABLES ........................................................................... 155 This Report is based on iformation available up to end-February 2002 6 Charts Chart 1 Gross domestic product, GDP ............................................. 18 2 Contribution to growth ...................................................... 21 3 Nominal and real effective krone rate ............................... 22 4 The balance of payments .................................................... 24 5 Change in domestic lending by banks and mortgage-credit institutes .................................................. 25 6 Wage increases in Denmark and abroad ........................... 26 7 Increase in consumer prices and underlying inflation ............................................................ 27 8 Relative domestic demand and balance of payments ...... 28 9 The krone rate vis-à-vis the euro ........................................ 30 10 Interventions in the foreign exchange market (monthly figures) ................................................................. 31 11 The banks' lending and deposit rates ................................ 35 12 Term structures in the USA and Germany ......................... 40 13 10-year yield and stock index in the USA .......................... 41 14 10-year yields in the USA, Germany, UK and Denmark ........................................................................ 42 15 Yield differentials to the USA ............................................. 44 16 Euro vis-à-vis dollar and yen ............................................... 45 17 US capital imports ................................................................ 46 18 Swedish krona, Norwegian krone and pound sterling vis-à-vis euro ............................................... 47 19 Stock indices, USA, Europe and Japan ............................... 48 20 Stock indices, Nordic countries ........................................... 49 21 Stock indices, selected emerging markets ......................... 50 22 Banks' annual growth in deposits and lending ................. 52 23 Mortgage-credit institutes' gross new lending by loan type, year-end ........................................................ 53 24 Assets of investment associations by fund type, year-end ........................................................ 54 25 Early redemptions of mortgage-credit bonds and bond yields ................................................................... 55 26 Circulation of individual banknotes ................................... 62 27 Circulation of individual banknotes – seasonal pattern ... 63 28 Average denominations of banknotes and coins ............. 64 29 Distribution by age and gender, year-end 2001 ............... 97 7 Tables in the text Table 1 Key figures for the Danish economy .................................. 21 2 The Danish labour market .................................................. 23 3 Interest rates of Danmarks Nationalbank and the ECB .... 33 4 Capital flows ........................................................................ 37 5 Outstanding volumes of listed domestic krone- denominated bonds (nominal value) ................................. 55 6 Krone payments ................................................................... 69 7 Euro payments ....................................................................