If one needs to learn as to how a crisis can be managed then examples can be taken up from Denmark and its bank regulators. It was for the second time in a year that the government there has overtaken a bank on force because it was unable to take control of its situation. Name of the bank is Amagerbanken and it was taken into custody in February similar to the fate suffered by Fjordbank Mors.
What is different between other European banks and Danish bank is that they simply totally wipe out the equity holders and on the way impose haircuts on the senior bondholders only. In case of Fjordbank Mors the bond holders lost close to 26 per cent while in case of Amagerbanken the loss was to the tune of 41 per cent.
They regulators of the country have already announced that it is the bondholders and not the taxpayers who are going to suffer the loss that a particular bank is making. The timetable for winding up of a bank has been clearly set down to 2013.