Danske Bank and a number of other Danish banks participate in the guarantee scheme that the Danish government signed on October 5. The guarantee will remain in force for two years and protects deposits and unsecured claims in Danish financial institutions.
Owing to the situation in the international financial markets, action had to be taken. The guarantee will secure stability in the financial sector in Denmark and thus also among corporate customers. But it does not come cheap. The financial sector will have to pay – not least Danske Bank owing to its size. Had Danske Bank decided not to participate in the scheme, the bank would have been up against banks benefiting from the guarantee.
We want to contribute to a solution
"Danske Bank wants to help solve the sector's problems, so that it is not thrown into a crisis that will attract global attention to Danish banks, Danish businesses and the Danish economy," says Peter Straarup, Chairman of the Executive Board.
"We will see changes in the financial sector over the next two years, but the conditions for stability are now in place. Danish depositors are protected because there is no longer any cap on the amount covered. Danske Bank is a strong and solid bank, and the new agreement underpins the Group’s already high rating and eases access to additional funding".
Solvency – not affected by the fall in the Bank’s shares
The price of the Group’s shares has declined sharply since the agreement was announced. But there is no direct link between the share price and the Group’s solvency.
Published on October 8, 2008
Update – October 10, 2008:
Customers of National Irish Bank are covered by the guarantee issued by the Danish government and adopted by the Danish parliament with effect from October 5, 2008.