Just add a neolib government and stir. Violá: Instant Disaster.

Yes, I'm patting myself on the back for getting this right long before the Danish newsies started bothering to connect the dots. I pointed out the Ponzi-scam nature of the then-current Danish boom already during the last election campaign (see, e.g., this diary, Note II near the bottom).

- Jake

Friends come and go. Enemies accumulate.

... Roskilde Bank is actually the second small Danish bank to go belly-up over a combination of investments in foreign subprime bonds and domestic subprime-lite borrowing.

The first was Bank Trelleborg, and that's a tale in itself: The shareholders are currently suing the Board and CEO for predatory salesmanship, illegal price manipulations, insider trading a probably a couple of other things, because the bank had a specific and heavily-enforced policy that their investment advisers had to recommend the customers to purchase the bank's own stock and paint rather rosy pictures of the viability of said stock.

By the end it was, of course, obvious to the management by then that the ship was going to sink, but the policy was never rescinded...

- Jake

Friends come and go. Enemies accumulate.

The worse the economy becomes the more desperate the grifters become to pedal their products.  Do you have newly appointed foxes guarding the financial hen house?

"It is not necessary to have hope in order to persevere."

a passing thought... is this fever of bad loans perhaps an inevitable consequence of the whole usury model?  i.e., the outstripping of tangible asset worth by notional money due to compounding interest over time (which makes money multiply far more rapidly than trees, potatoes, eggs, fish, wheat, etc)?  a later consequence is devaluation of the money supply, but an earlier symptom (it seems to me, just watching from the sidelines) is the desperate search of "too much money" for value to represent, i.e. for hot capital to find some real-world value to invest itself in.  when the amount of capital out there exceeds the worth (at current price points) of available real property and assets, then it starts to invest itself in imaginary or wildly overvalued property -- to create notional bubbles of value -- rather than sit quietly in savings accounts at "unacceptably low" (non-usurious?) rates of return.

just slowly chewing on the problem from my very hands-on little world here at the dock... where a significant chunk of the local economy is informal barter and time trade, plus a lively gift/share economy...

The difference between theory and practise in practise ...

In Norway the "Boligbyggelag" is a quasi-Coop organisation which is similar to the Danish Andelsboligforeninger.

The deal is that an individual "buyer" pays an entrance fee at a fairly low rate and they are then liable for a proportional share in a collective mortgage loan which typically finances most of the building.

This collective mortgage was subject to a form of insurance against individual defaults.

This model has worked extremely well since the Second World War generally funded by the State owned HusBanken but often sponsored or co-financed by municipalities, typically by providing the land.

About three or four years ago, as a way of allowing people onto the "housing ladder" these vehicles were opened up to developers who promptly built overpriced buildings and aggressively marketed them to young buyers in particular.

The buyers borrowed the "entrance fee" - say £50,000 to £100,000 from private banks - and the banks ignored the fact that the buyers were also taking on the collective debt.

To make matters worse, most of this new generation of Boligbyggelag did not have an insurance bond.

This is all now going drastically "pear-shaped" as a specifically Norwegian variation of sub prime.

Firstly, there is a "Death Spiral" effect, whereby when  one person defaults, and "walks away", the rest of the co-owners are then sharing his part of the  mortgage as well as their own.

Most of these projects are in huge negative equity, and indeed membership cannot even be given away, due to the onerous nature of the collective liability.

Many individuals have complained to the Banking Ombudsman, and already many of the individual private bank loans have been cancelled as a result.

Three different Norwegian ministries are trying to work out solutions to the problem.

"The future is already here -- it's just not very evenly distributed" William Gibson

going from 4.3% to 5.3% over ten years is hardly usurious.
I read that Denmark was officially in a recession already?

In the long run, we're all dead. John Maynard Keynes