From Bank Package to Exit Package

Abstract

When the international financial crisis hit Denmark in the autumn of 2008, a majority of the political parties in the Danish Parliament passed the Bank Package , involving a general two-year government guarantee for payment of all unsecured, senior claims against (almost) all Danish banks. The total guarantee commitments were approximately two times Denmark's GDP. In the beginning of 2009, the same parties adopted the Credit Package , under which Danish banks could apply for a government-funded injection of hybrid core capital and an individual government guarantee for their new unsecured, senior debt with a maturity of up to three years. Finally, the parties adopted the Exit Package in the spring of 2010, which replaced the Bank Package when it expired at the end of September 2010.