Lars Rohde: From national regulation to an international level playing field

Speech by Mr Lars Rohde, Governor of the National Bank of Denmark, at the anniversary conference on Banking & Supervision, Copenhagen, 3 October 2019.

Central bank speech  | 
07 October 2019

Thank you for inviting me to speak today. I have been looking forward to this.

What are the characteristics of banking?

In the words of the historian Søren Mørch - loosely quoted - banking be-longs in the department where rabbits are pulled out of top hats and la-dies are sawn in half. This only works if the audience - the banks' cus-tomers - behave as expected and do what they usually do.

If the customers do not trust the bank, there will be a run on the bank. The trick will fall flat, and the money will vanish.

We can try to regulate our way out of the risk that the trick will fall flat. But whatever we do, we can never guarantee that the banks will not ex-perience problems. So does that mean that we should avoid regulation? The answer is "no". Regulation is a must.