Monday, August 25, 2008

Danish Central Bank Rescue

Denmark's central bank has taken over the country's eighth largest bank.

Nationalbanken said it bought Roskilde Bank for 37.3 billion kroner ($7.43 billion) because the stock-listed bank failed to find a buyer to take it over.

Last month the central bank granted a liquidity facility to Roskilde Bank and bought its debt until it could be resold.

Roskilde Bank had a balance sheet of 42.9 billion Danish kroner ($8.9 billion) at the end of March. A large part of its loans were for real estate.

Nationalbanken said that it has the backing of the government and would get a guarantee to cover any losses it might suffer in the takeover.

Roskilde Bank's operations will continue in a new bank under the same name, it said.

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