‘Bad bets on commercial loans’ caused Danish failure

Denmark’s latest bank failure was caused by bad bets on commercial property, a model for insolvency that continues to dominate the nation’s financial woes, Jyske Bank chief executive Anders Dam said.

Mr Dam, who on Friday agreed to take over Sparekassen Lolland after it failed to meet regulatory solvency requirements, won’t cover losses incurred by shareholders or subordinated creditors. Jyske has yet to calculate the final cost of the deal, he said.

Denmark’s state resolution agency has closed down 12 banks since the nation’s housing bubble burst in 2008, with a further 12 absorbed by stronger rivals.