Denmark has a clear idea of how to apply the EU’s vague rules on bank failures
Copenhagen — Denmark’s financial regulator plans to take an aggressive approach with banks that do not meet new rules designed to protect taxpayers."We need to act a lot earlier than we have acted," Jesper Berg, the director general of the Financial Supervisory Authority (FSA) in Copenhagen, said in a phone interview.As a regulator in the first European country ever to force losses on senior bank creditors, Berg says Italy’s plight with Banca Monte dei Paschi di Siena is proof regulators cannot afford to wait when capital levels test lower limits. The same conclusion can be drawn from Denmark’s own experiences during the financial crisis, he says.Denmark is taking an aggressive tack amid a lack of clarity over what regulatory action a breach of minimum requirements for own funds and liabilities (MREL) should trigger. The rule is the linchpin in Europe’s plan to avoid government bailouts of banks, but according to the European Banking Authority, the legal framework in question does n...
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