# Danish Banks - and you want to move your money?



## WizardDr (27 Jun 2011)

From FT - Aplaville today.

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.


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## andycole (27 Jun 2011)

Can I ask if this means that people with deposits of under 100K will also suffer a 26% haircut e.g. 100k - 26%?

I thought in Denmark all deposits were covered up to the 100k?

Question answered - looks like only people with deposits of over €100,000 will get hit by the 26% haircut?

'Creditors, including depositors with deposits exceeding €100,000 in Fjordbank Mors must therefore anticipate losses of approximately 26% as the bank closes,' the FSA said.


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## andycole (27 Jun 2011)

link - http://www.rte.ie/news/2011/0627/denmark-business.html


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## andycole (27 Jun 2011)

andycole said:


> Can I ask if this means that people with deposits of under 100K will also suffer a 26% haircut e.g. 100k - 26%?
> 
> I thought in Denmark all deposits were covered up to the 100k?
> 
> ...



"Creditors, including depositors with deposits exceeding 100,000 euros in Fjordbank Mors must therefore anticipate losses of approximately 26 percent as the bank closes," the FSA said.
"The bank's shareholders will have to acknowledge that their investment is lost, as will the owners of the subordinate liabilities," the FSA said.
Fjordbank Mors said at the weekend that about 450 of its 73,000 customers had deposits in the bank that would not be covered by the 100,000-euro guarantee. link - [broken link removed]


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## joe sod (29 Jun 2011)

how safe is national irish bank


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## marksa (29 Jun 2011)

joe sod said:


> how safe is national irish bank


 
a lot safer than our domestic banks, its ratings are in the A range even after all the losses borne on the failed Danish banks. NIB is a full branch of Danske


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## andycole (29 Jun 2011)

Since 2007 National Irish Bank has been a full branch of Danske Bank which I think is Denmark's largest bank. Its is covered by both the Danish and the Irish Deposit Guarantees. As of February 2001 - [broken link removed]

However as reported recently - http://www.rte.ie/news/2010/1217/nib-business.html
NIB says its debts will remain high for 2011.

Quote "I_n a recent interview, Danske Bank's CEO Peter Straarup said the group was changing its strategy in Ireland, pulling back from high street banking to focus on wealthy and corporate clients.
Danske has already closed half of National Irish Bank's branches nationwide. Straarup repeated that Danske Bank had no wish to sell National Irish Bank, nor try to expand further in the country through acquisitions._" 

Recently Danske Bank has had an argument with Moody's rating agency with regard to mortgages - link: [broken link removed]

Also: http://www.businessweek.com/news/20...asel-moody-s-hurting-danish-covered-debt.html

But I think overall its still maintains an average A Rating unlike every other Irish Bank.


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## WizardDr (4 Jul 2011)

How could it be a 'lot safer' if Depositors have coughed up and when there is also currency risk.


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