European Union approves Danish banking bailout

Denmark won EU approval Friday for its plan to guarantee bank deposits and liabilities in sound banks and force insolvent banks into liquidation. The European Commission praised Denmark for a plan that would not worsen the financial situation in other countries, taking a swipe at Ireland's banking guarantee that some feared would attract savers from other countries and give Irish banks an edge over rivals. Denmark will guarantee all deposits and standard borrowings in "fundamentally sound financial institutions" based in Denmark for two years. This aims to give banks a solid rating that would help them secure financing while lending between banks remains tight. Banks that cannot cover their own debt — not within legal solvency requirements — must be unwound if they cannot find a buyer. The guarantee is open to all banks... [read full story]