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The main component in the rescue plan is the establishment of a fund of up to DKr 35bn (€4,67bn) financed by the banks and guaranteed by the Danish state. The contribution of up to Dkr 35bn will be shared by the banks according to size, and additional needs will be covered by the state. The programme ends automatically after two years, but can be prolonged if need be.



Contribution to the fund (and thereby covering by the guarantee) is optional, and till now one bank (Lægernes Pensionsbank) has decided not to participate. If several banks choose to keep out of the fund, it risks diminishing the effect of the plan.



It is key to the rescue plan that financial institutions do not take on greater risks because of the increased liquidity guaranteed by the rescue plan. No marketing of the underlying guarantee can be made and financial institutions are not allowed to extend activities that would not have taken place without the guarantee. Any speculation in the rescue plan can entail dismissal of executives and board members in financial institutions or exclusion of the financial institution of the guarantee.



The rescue plan also implies restrictions of the use of share option schemes for managers, share buy-back schemes and there can be no issue of dividends (see article).



For more information see www.oem.dk