The Danish Bank Association and The Danish Ministry of Economics and Business affairs, respond to the draft law, which will give limited power to the Danish Pension fund ATP to operate banking and credit operations through subsidiaries.
Denmark’s Ministry of Economic and Business Affairs approved the draft law and mentioned that the law was ready for submission, following the consultation period. The new law will allow ATP to obtain control of banks and mortgage companies through subsidiaries. However, the law does come with certain limitations, beginning with ATP cannot hold more than a 5% share of the loans in the market, as well as ATP cannot sell administrative services to affiliates. The limitations placed on ATP will be monistored by the FSA.
Economy and Industry Minister Brian Mikkels, commented on the new ATP law :'' I believe that with the final adjustments have found a good balance between considerations of competition, financial stability and confidence in financial institutions.’’
In contrast, The Danish bankers association, called the new ATP law ‘Unacceptable,’ and ‘unsatisfactory.’
Jørgen A. Horwitz, Director at the Danish Bankers Association, commented on the ATP (and LD) law, in the company press release. ''ATP's law is unacceptable distortion. It is highly unsatisfactory that the government allows a permanent state-owned banks, which can drive the market, not competitively. As a minimum, should construction be limited.’’
Horwitz mentioned that ATP receives mandatory state funds, and an ATP-owned bank would be at a much better competitive position than other banks. However, he mentions how this proposal involves a ‘completely unacceptable breach of competition principles.'
He continued by adding, ''It is reprehensible that the government allows a single operator to have significant competitive advantages. The rating agencies will undoubtedly confer ATP's ownership of an exceedingly valuable. The government guarantees will thus give daughter bank conditions in the international financial markets that other banks cannot achieve.’’
He concludes by stating, ‘’It is regrettable that the government chose not to pull the bill back. We can only urge the government and parliament to at least add a time limit on the ATP's ownership.’’
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