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ATP CEO insists pension fund in no way added to pressure on Danish krone

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Denmark’s ATP has moved to make it clear that the institution was not one of those domestic pension funds that had, according to the country’s central bank, put upwards pressure on the Danish krone in January and February this year.

Carsten Stendevad, chief executive of the DKK823bn (€110.5bn) statutory pension fund, told IPE: “ATP has in no way added to the upwards pressure on the Danish krone.”

He already stated, he said, when the pension fund published its annual result on 5 February, that the percentage of ATP’s assets denominated in Danish kroner was lower today than it had been at the end of last year.

And that end-of-year figure was, in turn, lower than the level it had been a year before, he said.

“That clearly shows we mean it when we say we have full confidence in the krone’s peg to the euro,” said Stendevad.

Yesterday, Lars Rohde, director of Danmarks Nationalbank, said it was Danish pension funds, life insurers, domestic investment funds and businesses that had put most of the upward pressure on the krone in January and February rather than foreign speculators.

He said these parties had forced the central bank to intervene in the currency markets to defend the krone peg in January and February by buying DKK295bn (€40bn).

The Danish currency became a target for speculators in mid-January after the Swiss National Bank (SNB) shocked financial markets by abandoning a three-year-old cap on the franc against the euro.

SNB officials had only days before described the cap as a policy cornerstone.

The European Central Bank’s (ECB) subsequent move to begin a wide-scale quantitative easing programme was also a factor behind the surge of krone-buying, Rohde said.

In February, ATP said it had no contingency plans ready for the eventuality that the Danish krone’s peg to the euro could break because it had “full and firm confidence” in the link.

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