The Feb. 6 failure of Amagerbanken A/S, the country’s fifth-biggest listed lender, marks Denmark’s eighth bailout of a local bank since 2008 and shows the smallest Scandinavian economy may be faring worse than Sweden and Norway in emerging from the financial crisis. Amagerbanken is the first bank to fail since Denmark on Sept. 30 ended its blanket guarantee of deposits and senior debt, leaving some creditors with losses.
it estimates creditors and depositors will lose about 41 percent of holdings not covered by the state guarantee. This would affect less than 2 billion kroner in bonds, according to a spokesman at Financial Stability, who declined to be named citing company policy.
Depositors will lose as much as 700 million kroner, Borsen reported today without saying how it obtained the information.
bloomberg.com/news/2011-02-07/danish-banks-face-consolidation-as-amagerbanken-leaves-investors-in-lurch.html
grumpy
February 8, 2011, 12:59pm
#2
That’s very mean of them isn’t it?
Maybe we could extend the Irish guarantee to cover the Danish bondholders .
You’d think the Danes would just forget about education, healthcare, capital spending, investment etc for the next 30 years and just cough up the cash.
Selfish really…
flash
February 8, 2011, 1:20pm
#5
It seems their bailout wasn’t “the envy of the world”. So are the Danes now “a pariah” with foreigners not going anywhere near the country?
I guess the Brussels Boys couldn’t bully the Vikings into paying up. We look so f**king spineless.
Difference between Denmark and Ireland is that Denmark can still borrow money on international markets because its debt and deficit are under control.
Yield on 10yr danish bonds is 3.3%bloomberg.com/apps/quote?ticker=GDGB10YR:IND
The choices about which bank liabilities we guarantee are not ours anymore but those of last person willing to lend us money to pay our running costs.
We are now entirely dependent on the EU for trade and credit so the idea that we can unilaterally do anything is a joke.
‘Systemic importance’…
Write it out 100 times!
Does their non-membership of the euro permit them to do so?
HAZE
February 9, 2011, 12:55am
#9
Ireland doesn’t do bailouts (properly), but if we did, they would probably be the cheapest bailouts in the world (so far).
If I understand the article correctly, the prospect of depositor losses has not been confirmed, but commentators think it will happen. What does
mean, if the guarantee has expired?
you can bet Lenny is trying to find a way…Trichet thinks it would be a good idea too.
pishwish:
If I understand the article correctly, the prospect of depositor losses has not been confirmed, but commentators think it will happen. What does
mean, if the guarantee has expired?
Dunno, but perhaps depositors have had some long-standing protection (say equivalent to €20k) and the system has reverted back to that, as would have happened in Ireland had the new scheme not been extended.
ftalphaville.ft.com/blog/2011/06 … f-failure/
Another Danish bank falls into a fjord of failure
Translation: Another Danish bank — Fjordbank Mors — has been taken over by Denmark’s Finansiel Stabilitet as part of of the so-called ‘Bank Package III’ bail-in rules passed last year. The bank wind-up rules mean investors in failed banks’ senior debt, and even depositors, will be exposed to losses.
The first to fail under Denmark’s new resolution rules was, of course, Amagerbanken, early this year.
In that sense the failure of Fjordbank is more of the same. According to independent research firm CreditSights, Finansiel Stabilitet has given Fjordbank’s assets a preliminary valuation of DKK 7.8bn (€1bn) — which would cover about 74 per cent of senior liabilities. In other words, investors in the bank’s senior debt and the 450 or so deposit holders of Denmark’s €100,000 limit are looking at a haircut of about 26 per cent — somewhat lower than Amagerbanken’s 41 per cent.
Don’t be fooled by the repetition, however. There had been some talk of the Danish government backing off burdensharing for senior bank bondholders, or at least making it easier for healthy banks to buy troubled ones, after a spate of ratings downgrades and rising funding costs. But with the take-over of Fjordbank Mors it looks like Denmark is fully set on senior losses, at least for this small bank.
‘Bad bets on commercial loans’ caused Danish failure - Peter Levring, Bloomberg → irishexaminer.com/business/b … 21023.html
Denmark’s latest bank failure was caused by bad bets on commercial property, a model for insolvency that continues to dominate the nation’s financial woes, Jyske Bank chief executive Anders Dam said.
**Denmark’s state resolution agency has closed down 12 banks since the nation’s housing bubble burst in 2008, with a further 12 absorbed by stronger rivals. **
there is more
