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Danske Bank given some blame for financial crisis
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August 8th, 2013
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This article is more than 11 years old.
Risky behaviour and a lack of preparedness by Denmark’s largest bank may have contributed to worsening the financial crisis
Danske Bank is expected to be given some of the blame for the development of the financial crisis in Denmark, Berlingske newspaper reports.
In January 2012, the government established the so-called Rangvid Committee, which was tasked with investigating the national aspects that contributed to the Great Recession. The committee is expected to present its findings in September, but Berlingske has discovered that an entire chapter of the report will be dedicated to Danske Bank and details its unpreparedness to handle the crisis and its increased risk-taking in the years running up to the crisis.
“There is hardly any doubt that the bank placed itself in a vulnerable position that, given its size, reduced its financial stability,” the report states, according to Berlingske.
Neither Dansk Bank nor the Rangvid Committee wished to comment to Berlingske before the publication of the final report.
The committee is headed by Jesper Rangvid, a professor of finance at the Copenhagen Business School. In January, Rangvid told the centre-left think tank Cevea that the report is unlikely to result in legal action.
“The committee wants to try to increase the understanding of what happened,” Rangvid said, adding that the committee simply did not have enough resources to uncover sufficient evidence for a trial. “A major goal would be to improve the level of debate about the subject. I hope that the report's conclusions will start a debate that focuses on Danish banks and the need to split their high-risk investments from their normal banking so that society becomes less vulnerable to a future crash.”
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