1. DANMARKS NATIONALBANK Israel Study Visit to Danmarks Nationalbank October 2013, Tue Mathiasen, Statistics

2. Agenda Welcome Organization/ background Financial Statistics Scope Work Programme Cooperation Internally Externally – Statistics Denmark and other partners

3. The three main objectives of Danmarks Nationalbank Stable prices Danmarks Nationalbank helps to maintain stable prices, i.e. low inflation. This is done by pursuing a fixed-exchange-rate policy against the euro. Safe payments Danmarks Nationalbank promotes safe settlement of cash and electronic payments. This is done by issuing banknotes and coins and ensuring that payments can be settled between banks. A stable financial system Danmarks Nationalbank helps to maintain the stability of the financial system. This is done by overseeing financial stability and payment systems, compiling financial statistics and managing the central government’s borrowing and debt.

4. Legal basis The objectives build on the Danmarks Nationalbank Act of 1936. In this it is stated that "Danmarks Nationalbank … shall as the Central Bank of this country have the object … to maintain a safe and secure currency system in this country, and to facilitate and regulate the traffic in money and the ex-tension of credit”. This description still fits the tasks of Danmarks National-bank today. “The Bank collects, compiles and disseminates statistical information within its competence and is allowed to use this information when necessary in order for the Bank's fulfilment of its tasks, cf. § 1.” [july 2010]

5. Organisation

6. Statistics Department Staff, primarily economists, 36 FTE

7. Financial Statistics - scope Money and Banking Statistics Statistics for Investment Funds Securities Statistics External Statistics Quarterly Financial Accounts

8. Financial Statistics – Work Programme Ambitious development plan towards 2014 New reporting schemes for BOP/IIP – recently implemented (full coverage of I&P balances) New MFI-reporting system - testing New Securities Statistics system (sources and methods) New BOP/IIP and Financial Accounts systems (sources and methods) – updated SNA/ESA New standardised and integrated reporting and data checking IT platform Financial Sector reporting to Danish FSA through Danmarks Nationalbanks IT-platform Microstatistics on household wealth - financial and non-financial assets and liabilities

9. Cooperation - internally User-driven development of new and enhanced statistical products MFI-statistics Microstatistics on households … Analytical work across the statistical, capital markets and macroeconomic domains Banks, Credit and Business Cycles Foreign Direct Investments Denmark as a Creditor Nation Corporate Saving and Investment The Banks' Interest Rates The Wealth and Debt of Danish Families

10. Corperation – externally Input/output, data and information sharing Financial sector, FSA, Statistics Denmark, ECB/ESCB, European Commission (Eurostat), BIS, OECD and IMF

11. Cooperation with Statistics Denmark Agreement on Cooperation between Statistics Denmark and Danmarks Nationalbank Division of responsibility Division of labour Cooperation in various statistical areas; National Accounts, BOP/IIP, Business Register Cooperation on output http://statistikbanken.dk/statbank5a/default.asp?w=1920 Cooperation on statistical development E.g. Microstatistics on Household Wealth and Liabilities

12. MOTIVATION Total household sector debt-ratio by country and year Note: For Germany 2010: The data refer to 2009. For Norway 1980: The data refer to 1987. Source: Isaksen et. al. (2011): Household balance sheets and debt – an international country study, Danmarks Nationalbank, Monetary Review, 4th quarter, Part 2. 12 Micro-based wealth and debt statistics for Danish households

13. MOTIVATION Aggregate debt ratio of Danish households is comparatively high. Financial accounts can only supply aggregate data. In-depth analysis requires additional data on distributions. 13 Micro-based wealth and debt statistics for Danish households

14. THE STATISTICAL SET-UP Employers Banks Pension funds Etc. Danish Tax Authority Civil Register Central Business Register Building and Housing Register Local authorities Perso n ID Dwelling ID Enterprise ID Adresse s Work place Statistics Denmark 14 Micro-based wealth and debt statistics for Danish households

15. Bank debt THE STATISTICAL SET-UP Personal income Capital income Mortgage debt Debt to foreign countr. Shares Person ID Adm. register: INCOME Geography Person ID Adm. register: POPULATION … Dwelling ID Enterprise ID Custody account Guaranteed interest Defined benefit Person ID To be reported: PENSION WEALTH Tax code Bonds Property (taxable val.) Pension payments … Deposits Age Civil status Spouse ID Family ID Socio-economic status Currency Loan-to-value Interest rate details Deferred amortisation Person ID Prelim. reports: MORTGAGE LOAN Collateral (property) Interest payment due Original principal Outstanding debt Arrears … 15 Micro-based wealth and debt statistics for Danish households

16. ANALYTICAL RESULTS: Unequal distribution of debt Distribution of family gross debt ratio Note: The aggregate gross debt ratio is calculated as aggregate gross debt divided by aggregate income after tax for all families in the population. Source: "The Wealth and Debt of Danish families": Monetary Review, 2012 2th Quarter – Part 2. 16 Micro-based wealth and debt statistics for Danish households

17. ANALYTICAL RESULTS: Wealth and debt goes hand-in-hand Distribution of assets across gross debt intervals, 2010 Total assets excl. pension Pension wealth 17 Micro-based wealth and debt statistics for Danish households

18. ANALYTICAL RESULTS: Lower savings among families with deferred-amortisation loans Median values for savings and redemption ratios, 2010 Note: The Chart shows the median value in 2010 for each stated savings and redemption ratio among homeowner families who raised mortgage debt in the period 2003-09, whose oldest family member was under 60 years old in 2010, and who were not involved in real property transactions or raised mortgage loans during 2010. Source: "Danish families' Financial Robustness, Variable rates and Deferred Amortisation": Monetary Review, 2012 4th Quarter – Part 2. 18 Micro-based wealth and debt statistics for Danish households

19. ANALYTICAL RESULTS: Most families have robust finances … Financial margin and LTV, 2010 The families’ current financial situation…… and after an interest-rate increase of 5 pct. point Note: LTV ratios indicate the remaining debt as a percentage of the property value of the property serving as collateral for the loan. Property valuations are the mortgage banks' valuations at end-2010. Families with loans in several properties are included once per property, whereby a family may be included more than once in the same bar. Only families with mortgage debt are included in the Chart. Source: ”Danish families’ Financial Robustness, Variable rates and Deferred Amortisation”: Monetary Review, 2012 4th Quarter – Part 2. 19 Micro-based wealth and debt statistics for Danish households

20. NEXT STEPS The National Bank of Denmark Act (1936) § 1. "Danmarks Nationalbank […] shall as the Central Bank of this country […] maintain a safe and secure currency system in this country, and facilitate and regulate the traffic of money and the extension of credit." § 14a. "The Bank collects, compile and disseminates statistical information within its competence and is allowed to use this information when necessary in order for the Bank’s fulfilment of its tasks." § 14a, cont. "The Bank can request that individuals [red.] pass on information they posses to the Bank […] if it is necessary for the Bank to receive the information for the fulfilment of its tasks [see §1]." 20 Micro-based wealth and debt statistics for Danish households

21. NEXT STEPS Timeline 2012 Q42013 H12013 H22014-15 Consultations Dialogue with pension funds, banks and mortgage banks to define content – both in their capacity as data providers and users. Other users include empirical researchers from The Ministry for economic affairs and the economic model DREAM. Agreement Statistics Denmark and Danmarks Nationalbank agree to create the database. Initial reporting Pension funds, banks and mortgage banks report data for end 2012 and 2013. Access to anonymized micro data for researchers. Publication of aggregated statistics. Individual output to reporters. Reporting guidelines Reporting institutions receive reporting guidelines. Guidelines for mortgage loans should be ready by end-June and for pensions in autumn. 21 Micro-based wealth and debt statistics for Danish households

22. NEXT STEPS Future dataflow Dataflow Data collected under DN authority Data collected under DSt authority Individual pension data from the Danish Tax Authority (cpr-level) Danmarks Nationalbank Statistics Denmark Individual loan data from Mortgage banks (cpr-level) Quality check (cvr-level) against statistics on Mortgage banks Quality check (cvr-level) against statistics on Pension Funds and Banks Statistics on balance sheets of Banks and Mortgage Banks Income, Wealth and Socioeconomic data (cpr-level) Integration (cpr-level) Data collected under DN/DSt authority Wealth and Debt (cpr-level) Publication of micro- based Pension Statistics Research Services (anonymised cpr-level) Publication of micro- based Wealth and Debt Statistics Analyses of Wealth and Debt (anonymi- sed cpr-level) Wealth and Debt (anonymised cpr-level) Extended reports with individual pension data from Pension Funds and Banks Danish Tax Authority 22 Micro-based wealth and debt statistics for Danish households