http://www.bloomberg.com/news/2011-09-26/danish-bank-crisis-deepens-as-lender-tax-threatens-capital-1-.html
"Denmark's banking crisis is deepening as the new government's plan to impose a tax on lenders threatens to deplete capital at a time when most of the country's banks have no access to funding markets.
"The banks are under severe stress," said Jesper Rangvid, professor of finance at the Copenhagen Business School, in an interview. Imposing extra taxes on the country's banks "definitely does not contribute to banking stability."
The Social Democrat-led coalition that won this month's national election wants to impose an extra 6 billion kroner ($1.1 billion) in taxes a year on Denmark's banks, and has earmarked the funds for services including health care and schooling. The proposal is adding stress to banks struggling to emerge from a crisis that has raged since February, when the failure of Amagerbanken A/S triggered the European Union's first senior creditor losses within a resolution framework.
Lending to Danish businesses fell in August to the lowest in almost five years, while bank share prices have plunged. Danske Bank A/S, Denmark's biggest lender, has lost almost half its Value this year even amid a ban on short-selling of financial stocks in place since 2008. The bank is trading at about 50 percent of the book value of its equity. Credit default swaps on five-year senior debt issued by Danske trade about 60 percent higher than equivalent contracts for Stockholm-based Nordea Bank AB. (NDA)"
"Denmark's banking crisis is deepening as the new government's plan to impose a tax on lenders threatens to deplete capital at a time when most of the country's banks have no access to funding markets.
"The banks are under severe stress," said Jesper Rangvid, professor of finance at the Copenhagen Business School, in an interview. Imposing extra taxes on the country's banks "definitely does not contribute to banking stability."
The Social Democrat-led coalition that won this month's national election wants to impose an extra 6 billion kroner ($1.1 billion) in taxes a year on Denmark's banks, and has earmarked the funds for services including health care and schooling. The proposal is adding stress to banks struggling to emerge from a crisis that has raged since February, when the failure of Amagerbanken A/S triggered the European Union's first senior creditor losses within a resolution framework.
Lending to Danish businesses fell in August to the lowest in almost five years, while bank share prices have plunged. Danske Bank A/S, Denmark's biggest lender, has lost almost half its Value this year even amid a ban on short-selling of financial stocks in place since 2008. The bank is trading at about 50 percent of the book value of its equity. Credit default swaps on five-year senior debt issued by Danske trade about 60 percent higher than equivalent contracts for Stockholm-based Nordea Bank AB. (NDA)"
