What are Danmarks Nationalbank’s tasks?
Danmarks Nationalbank has three main objectives, which are to ensure that we have
- stable prices
- safe payments and
- a stable financial system
Whether inflation is high or low, it is always a key focus area for Danmarks Nationalbank, as one of our core tasks is to ensure stable prices. We do this by keeping the value of the Danish krone pegged against the euro. Denmark has been pursuing a fixed exchange rate policy since 1982.
Danmarks Nationalbank meets its safe payments objective through a number of measures, for example by ensuring that the security features and design of Danish banknotes and coins are of such a high quality that there is confidence in them. In addition, Danmarks Nationalbank helps ensure that electronic payments, for example Dankort payments, are settled securely.
A stable financial system means that potential problems in, for example, a bank do not spread to other banks or the entire financial system. Danmarks Nationalbank oversees and assesses financial stability in Denmark by continuously making analyses, assessments and recommendations.
How are Danmarks Nationalbank’s tasks determined?
The statutory basis for Danmarks Nationalbank’s tasks is the Danmarks Nationalbank Act (Lov om Danmarks Nationalbank) from 1936. Section 1 of this act stipulates that the object of Danmarks Nationalbank is “to maintain a safe and secure monetary system in Denmark, and to facilitate and regulate circulation of money and credit granting”. This mission statement is still an adequate description of Danmarks Nationalbank’s tasks today.
Is Danmarks Nationalbank independent?
Yes, Danmarks Nationalbank is a self-governing and independent institution established by law. Danmarks Nationalbank’s independence dates right back to its establishment in 1818. This independence is incorporated into the Danmarks Nationalbank Act of 1936, in that Danmarks Nationalbank’s Board of Governors has the sole responsibility for determining monetary policy interest rates, i.e. without interference from the Danish government or the Folketing (Parliament).