By an act of 7 April 1936, the Danish National Bank, the bank of issue since 1818, was converted from an independent to an official government corporation. Its head office is in Copenhagen, and it has branches in provincial towns. The Nationalbank performs all the usual functions of a central bank, and it holds almost all the nation's foreign exchange reserves. Commercial banks provide short-term money to business and individuals, almost always in the form of overdraft credits, which are generally renewable.
Danish banks, hit particularly hard by the Nordic banking crisis of 1991-93, have rebounded. By the end of the decade, they had rebounded completely. Their recovery was bolstered in large part by continuing capital gains in securities markets. In mid-2003, there were 187 commercial and savings banks, eight mortgage credit institutions, 30 investment companies, 138 non-life insurance companies, and 94 life assurance companies and multi-employer pension funds.
Credit and mortgage societies are active in Denmark. In 1982, index-linked real estate loans were introduced, initially carrying nominal interest rates of 2.5% per year, with balance and installments adjusted yearly according to variations in the consumer price index and wage indexes. In the mid-1990s, the lending rate was about 12%. The International Monetary Fund reports that in 1999, currency and demand deposits—an aggregate commonly known as M1—were equal to $54.7 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds— was $97.5 billion. The money market rate, the rate at which financial institutions lend to one another in the short term, was 3.37%. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 3%.
The stock exchange (or Bourse) in Copenhagen was built during 1619-30 by Christian IV. He subsequently sold it to a Copenhagen merchant, but it reverted to the crown and in 1857 was finally sold by Frederik VII to the Merchants' Guild. Although it is the oldest building in the world built as an exchange and still used as one, the nature of the business transacted in it has greatly changed. Originally a commodity exchange equipped with booths and storage rooms, the Bourse is now almost exclusively a stock exchange. In 1970, the Stock Exchange was placed under the jurisdiction of the Ministry of Commerce with a governing committee of 11 members. Only a few bond issues are made by manufacturing firms each year. In 1980, Denmark took the initial step toward becoming the first country to convert the issuing of stock, share, and bond certificates into a computer account registration system.