Lars Rohde: Ultra low interest rates from the perspective of a central banker

Opening remarks by Mr Lars Rohde, Governor of the National Bank of Denmark, at the conference "Long run outlook for interest rates", 1 September 2021.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Good morning. In my remarks today, I will explore the topic of low inter-est rates from a Danish perspective. I hope that this will set the scene for today's discussions in what will surely be a very fruitful conference.

The persistent decline in a wide set of interest rates is one of the most important topics in modern macroeconomics and finance. It is driven by a host of underlying factors operating at a global level, and it has implica-tions for households, firms and financial institutions of all shapes and siz-s.

The decline in interest rates is also affecting the scope for conducting economic policies. Most obviously, it challenges the effectiveness of con-ventional monetary policy as policy rates have moved closer to their ef-fective lower bound. But it also has implications for the conduct of fiscal policy as well as for the optimal deployment of macroprudential tools. The link between low interest rates and fiscal policy in Denmark will be the topic for the panel discussion later this morning.