Denmark: Financial System Stability Assessment with reports on - IMF

445. The assessor did not face any problem limiting the assessment process. During themission, the assessor also carried out an assessment of the observance of the CPSS/IOSCORecommendations for Securities Settlement <strong>System</strong>s of VP, the Danish Central SecuritiesDepository (CSD).Institutional and market structure6. KRONOS is the RTGS system used to settle monetary policy transactions and largevalueinterbank transactions. It is a multicurrency system that settles transactions in Danishkroner and euro. For the settlement of euros KRONOS is linked to TARGET, the RTGSsystem of the ESCB. In addition, the system settles transactions in Swedish kroner andIcelandic kroner, however, only in connection <strong>with</strong> the settlement in VP of securitiesdenominated in these currencies. KRONOS also settles the kroner leg of foreign exchangetransactions that are cleared via the Continuous Linked Settlement (CLS) system. TheSumclearing (retail payment system) and VP (securities settlement system) settle via clearingaccounts that their participants have opened <strong>with</strong> Danmarks Nationalbank.7. The payment system infrastructure in <strong>Denmark</strong> is highly developed andtechnologically well advanced. A broad variety of payment instruments are processedvarying from checks and paper-based credit transfers to card transactions. In 2005, around1.1 billion payments <strong>with</strong> a value of DKr 5,027 billion were processed in the Sumclearinginfrastructure. With around 670 million payments by cards in 2005, <strong>Denmark</strong> had the highestnumber of card transactions per capita in Europe. Especially the use of Dankort, a commondebit card product of the Danish banks, is very popular and widely accepted by Danishretailers. Credit cards have only a minor market share due to the differences in price policy.A large amount of recurrent bills for telephone, utilities, and other services (168 millionin 2005) are paid via direct debits, <strong>with</strong> 9 out of 10 households using the services of PaymentBusiness Services (PBS). A similar service is developed for private and public businessenterprises for paying for goods and services bought from other firms.8. E-banking is intensively used in <strong>Denmark</strong>, while the use of checks is declining.About 2.7 million Danish citizens have opened an e-banking account and send in theirpayment orders via the internet. Checks are especially used for fulfillment of larger paymentobligations (average value per transaction cleared through the Sumclearing in 2005 wasDKr 22.850). The number and value of payments by checks have been halved since theintroduction of more modern payment instruments as the direct debit and Dankort in thebeginning of the 1980s. It is likely to decline further. Recent initiatives have made it possiblefor government agencies to increase their use of electronic credit transfers at the expense ofchecks, when making payments to citizens, since all citizens are obliged to have a bankaccount.