Feb 172011
 

The government has finally decided that one of the banks isn’t worth saving, and has forced senior bondholders to take haircuts of 41%.  Even more encouragingly, this action has been taken with the  full approval of the European Commission.

The government decided that taxpayers should not be made to suffer for commercial decisions taken by private investors and passed a law allowing it to close the bank, with the bondholders accepting much of the loss.

The government has put the people ahead of private business interests and has decided to protect the citizens from the greed of the crooked bankers,.

So far so good.

Unfortunately, the delinquent Amagerbanken is in Copenhagen and the government is Danish.

It seems that the EU is prepared to bless this burning of bondholders, while at the same time resolutely resisting an Irish action along the same lines.  It also seems that the Danish government possesses a maturity and sense of civic responsibility that our government lacks.

There were no calls to patriotic duty from politicians in Denmark.  Just patriotic action by a government that cares about its people.

  6 Responses to “Government Finally Allows Bank to Fail and Burns Bondholders”

Comments (6)
  1.  

    Bock, Do you know if the senior Bond holders were German or French Banks?

  2.  

    I have no information on the bondholders.

  3.  

    when i started to read this i thought it was a Yes Men prank.The yes men impersonate companies or politicians by setting up fake websites. when they get called for press confences or speaches they tell the truth and expose lies.On the anniversary of the Bopol disaster they got on the bbc to represent Dow Chemical.
    http://www.youtube.com/watch?v=SlUQ2sUti8o
    its an interesting strategy.

  4.  

    Depositors with deposits up to €100,000 are still safeguarded under Denmark’s normal deposit insurance rules. Any sums above that are no longer guaranteed. It would seem that some depositors will be effected. Although most of these depositors (over €100,000) would have had a connection to the Major bond holders in the first place. The Bondholders being hit by up to 41%. Great stuff!

  5.  

    Please refer to Bloomberg article below;

    http://online.wsj.com/article/BT-CO-20110216-704975.html

    The Danes had 3 bank bailouts between 2008 and 2010. Then they grew some stones, enacted legislation, and burned some bondholders. As per Bloomberg article, the other banks will suffer a downgrade. We’ll need to see how it plays out, they may not be out of the woods yet.

    In the meantime the Portugese Finance Minister has admitted that they may need a bailout. Don’t these amateurs know you’re supposed to deny it until even the dogs in the street know you’re doing a “Comical Ali”?

  6.  

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