Danish covered bonds are currently used as the main instrument of bank liquidity management and there is no reason why they should not continue to serve this role. They are not so-called inside money (claims on other financial institutions) but claims on nonfinancial companies and, mainly, private households.
Now we have a target of keeping the CPI between 0 and 3 per cent (the target was widened after the general election of November 1996) and a need to have a good explanation if inflation diverges from that target.