 Thank you for the invitation here to speak today Ladies and gentlemen coming from Denmark a country with a formal opt-out from the monetary union My job here today is to present a few points from the perspective or not of a non-Euro area EU country Before setting out I would like to stress an underlying yet undeniable fact Namely that it is of paramount Importance for all EU member states irrespective of whether they become members or not that a banking union will be successful Financial stability in the euro area is a prerequisite for financial stability in all EU member states And it is a prerequisite for economic recovery and growth in the EU as a whole My second point of departure is that of the single market The euro and EMU were originally conceived as important steps to creating a better and deeper single market And the banking union should be seen as a natural next step The impetus for the for the reason efforts to create a banking union is though by contrast crisis-driven Nevertheless from a Danish perspective our assessment of the coming banking union remains centered on whether the proposed changes will remove the functioning of the internal EU market in financial services and It will improve the functioning of the internal EU market in financial services and provide a level playing field more generally in that industry a Key challenge as we see it is us to make sure that the creation of the banking unit does not create new barriers or fragmentation within the EU The design and setup of the banking union matters a lot to announce country like Denmark First of all from day one two of the largest financial institutions Operating in Denmark will have important parts of the operation supervised by the ECB These two to stand behind over 50% of total outstanding loans from Danish banks The SSM will thus become an immediate part of our supervisor universe whether we participate or not The comprehensive assessment of the SSM will also to a large and extent as possible be mimicked by the Danish authorities As long as that exercise is sufficiently tough, diligent and candid It will rest the ECB and SSM with instant high credibility It would also I believe think the role of the ECB in the setting of overall EU supervisory standards going forward In our opinion all outs countries should be closely involved in the preparatory work of the SSM Including in the development of the supervisory handbook and in all aspects of the comprehensive assessment Closer involvement of outs in the remaining work would create a greater sense of ownership and comfort Which at the end of the day could stimulate the appetite for the participation of non-euro EU countries in the banking union Turning to the single resolution mechanism It will be as someone different creature from the SSM Its credibility will take longer to build The lack of a proven track record of non-disruptive resolutions The lack of a build-up common resolution fund to start with and a probable lack of strict common rules for bail-in up until 2018 Important challenges that will have to be overcome Again seen through the lens of the single market It would be of the outmost value to have strict common rules for shareholder and creditors of bail-in With very limited discretion at the earliest possible date In our view the proposal whereby the joint resolution fund could be drawn upon to finance resolution But where there would not be recourse to full bail-in of shareholders and all unsecured creditors until much later Would be clearly unfortunate This would also expose taxpayers to larger risk full implementation of the PRR Directive bailout clause already from 2015 rather than 2018 would clearly make more sense Another issue is financing backstabs First a single resolution fund is an imperative be honest and even wholly outside the Proposed SRM framework as such the euro EU countries have the European stability mechanism as an ultimate common backstop for resolution funding That is all Well, but we absolutely have to make sure that there's some form of Equivalent backstop mechanism for non-euro area countries should they decide to participate in this regard we welcome the statement coming out from The most recent ecofin meeting on November 15 where the importance of equal treatment was underscored by the council However, we know that a practical solution giving body to this principle is yet to be agreed on To me the issue of ESM equivalent equivalence is Intimately linked both to the norm to the norm of a level playing field as well as to what I would term as one of the key advantages of possible Danish participation in the banking union That is that the banking union would be effective in providing an insurance scheme for the failure of a systemic financial institution Denmark is home to a large and very concentrated banking sector financial sector assets to GDP are close to 400 percent And our largest individual institution is also measured by its assets as share of GDP in the very top end of European banks So while the Danish system today is well-capsulized and robust with our most recent stress tests Indicating resilience to even large macroeconomic shocks Then here in exposure from a large concentrated system implies that joining a larger pool of or insurance system makes sense But it has to be a system with strict principles strong governance and full equivalence including for financing back steps At the same time another characteristic of the Danish financial system is the strong integration in the wider Nordic markets As long as there's a diverting approach to banking union participation among the Nordic countries Some benefits from joining such as strong central supervision of the large core of country institutions will be deluded and Hence again the very high importance that we attach to the single market aspects of the banking union project So where does that leave Denmark in relation to merging banking union participation at this particular point in time? Well, the Danish government is fully recognizing the high importance of the banking union While noticing that it awaits the conclusion of negotiations on the main elements to make a full assessment of the potential benefits and drawbacks of participation At the central bank. We are of the view that the current outline of the banking union is clearly promising harmonize supervision of high quality and sound overview of cross-country banking groups will benefit financial stability across all participating member states and to achieve its full potential Joint supervision will have to be complemented with a robust system of resolution including for the largest most complex and interconnected firms a Precondition for an out-country considering participation is that this system has a single resolution fund at its core By moving resolution to the Supernational level and by sticking to the principle of minimizing taxpayer liability in case of bank failure We believe the bank so the sovereign bank feedback loop would be significantly weakened From a Danish perspective it also remains of decisive importance that supervision and resolution Within the banking union will be conducted with full regard to the diversity of Credit institutions and their size and business models as it is spelled out in the SSM regulation To be more precise it is important for us that the special characteristics of Danish mortgage credit institutions are taken into into account also when SRM rules are set As I've indicated there are thus a number of important points that remain to be decided upon But overall the emerging design and content of the SSM and SRM seem to be in line with important principles cherished in my country Thank you for your attention