Denmark is amidst of a severe recession since the 1950s, as house prices, exports and consumer spending is on the decline and unemployment is on the rise. To replenish capital and promote lending in Denmark, a total of 50 banks and mortgage lenders in the Nordic nation have requested the government to make available $12 billion of state funds, reported Bloomberg.
The Ministry of Economic and Business Affairs had published in its website that the government is expected to release approximately $11.9 billion of funds, under the recapitalization program introduced on January 18.
Lene Espersen, Minister of Economy and Business Affairs, Denmark, said: “The aim is to avoid a credit squeeze in Denmark so that healthy firms and households can meet their financing needs. The vast majority of the Danish lending market will benefit from the scheme.”
As part of the October 2008 recapitalization package, 130 banks were already provided with approximately $10 billion worth government guarantees on their deposits and inter-bank lending.
