Policy notes


Currency hedging and the Danish pension sector

with Birthe Merethe Jensen and Asger Munch Grønlund

Nationalbanken Economic memo, May 2024 

We establish a statistically and economically significant relation between US stock price movements and currency flows from the Danish pension sector’s rebalancing of hedge positions. This channel can explain one-third of the sector’s total buying and selling of kroner. 


Refinancing behaviour of homeowners in Denmark when mortgage rates rise

with Henrik Yde Andersen, Erik Grenestam, Marcus Bjerregaard Læssøe, Alexander Meldgaard Otte

Nationalbanken Economic Memo, February 2023 

Rising mortgage rates have led to high mortgage refinancing activity in Denmark. The Danish mortgage system has a match-funding principle, and rising rates allow fixed-rate mortgage borrowers to buy back their mortgages at a discount. 62 per cent of this discount was used to reduce debt, while 38 per cent was cashed out. When cashing out, homeowners may become more sensitive to adverse developments in interest rates and house prices.

Publications at Danmarks Nationalbank


Monetary policy is tight and dampens inflation

Nationalbanken Monetary and Financial Trends, March 2024 

The significant monetary policy interest rate hikes since 2022 continue to impact the Danish economy. Most of the pass-through to Danish households’ and companies’ interest expenses has now taken place. Monetary policy is considered to be tight and contributes to a dampening of economic growth and inflation in Denmark. 



Monetary policy has been tightened further

Nationalbanken Monetary and Financial Trends, September 2023 

The recent widening of the monetary policy interest rate spread from Danmarks Nationalbank towards the ECB has led to a moderate weakening of the krone exchange rate vis-à-vis the euro. In Denmark, the pass-through of monetary policy interest rates to market rates has been faster and stronger than in the euro area. 



Monetary policy will cool down the economy

Nationalbanken Monetary and Financial Trends, March 2023 

Danmarks Nationalbank has hiked monetary policy interest rates in tandem with the ECB, but twice at a lower rate than the ECB to weaken the value of the krone against the euro. Market and lending rates have increased as a consequence of tighter monetary policy. The effects of this are expected to dampen economic growth significantly in 2023 and 2024. 


Turbulent times call for a focus on risk management

Nationalbanken Financial Stability Review, December 2022 

The financial markets are characterized by high inflation, higher interest rates and considerable volatility. Higher interest rates, high inflation and the prevalence of risky loan types, combined with declining property prices, will lead to credit losses in banks. The weaker economic outlook underlines the need for prudence in the institutions’ capital planning. 


Rising interest rates and prices can challenge banks’ customers

Nationalbanken Financial Stability Review, June 2022 

Housing lending remains driven by loans with deferred amortization. An amortization requirement for homeowners with a high loan-to-value ratio may contribute to a more resilient housing market. The ability of some companies to service their debt is put under pressure by higher energy and commodity prices and an interest rate hike. 

Podcasts (in Danish)