Since 2022 the European Central Bank and Danmarks Nationalbank have increased their key monetary policy rates at a record pace. This study shows that the pass-through to retail rates has been stronger in Denmark than in the euro area so far. Interest rate fixation periods are shorter in Denmark,...

The ECB has ended its net purchases of bonds. As a result, the ECB will no longer dampen volatility in the euro area bond markets to the same extent. This may lead to greater volatility in the Danish mortgage bond market. In recent years, banks have reduced their market-making capacity in the...

An important monetary transmission channel works through the impact of interest rate changes on non-financial firms' investment decisions. Higher monetary policy rates affect firms' investment decisions by raising the costs of external financing and lowering aggregate demand for goods and...

I present empirical results on the contribution of three key drivers of inflation in Denmark: an inflation trend anchored by inflation expectations; the Danish business cycle; and an energy price cycle. All three drivers contribute significantly to the development of inflation and explain most of...

Increases in long-term interest rates such as in 2021 entail a jump in the duration of Danish long-term mortgage bonds via an embedded prepayment option. The jump in duration may lower the demand for duration and thus longterm bonds. This may lead to selfreinforcing effects. Jumps in duration in...

Using data on a sample of European banks, we investigate what determines banks' use of Additional Tier 1 (AT1) instruments in their capital structure. Banks' capital structure can potentially influence their funding costs, especially during market stress. Banks' capital structure might therefore...