Banks

Bank failure will cost Denmark two billion euros



Denmark now had to flee another bank under the government rescue. Affected is the eighth largest bank in the country, the Amagerbanken. Thus it is the tenth bank, which takes refuge under the government rescue package and now is under state receivership. Reason for the poor financial condition of Amagerbanken said they had write-downs that resulted from the financial crisis. Of these, the Bank’s equity was probably used up so much that they no longer meet the legal requirements could ultimately.

Denmark comes this bust are now probably too expensive, the cost will be about 15.2 billion Danish kroner, the equivalent of around two billion euros. These costs are borne by the government entity for banks.
The Danish banking sector is fragmented as much as no one else in northern Europe. Throughout the country there are over 100 banks. Impact on large banks in the country, such as Nordea, Danske Bank and are not afraid, because they have little or no investment in the Amagerbanken.

The bank is now under the care of the banking authority, the daily business operations should be continued until one has reached the legally required capital and liquidity levels that the Bank be continued. As in Denmark, the state can not be held responsible for bank failures have to savers who have deposited at the bank more than 100,000 €, with an expected closing of the bank probably with a loss of about 41 percent.

Central Bank Governor Nils Bernstein said on Sunday night that the Danish financial sector have enough capital and that a bust of Amagerbanken capital and liquidity not at risk.