Denmark’s central bank said earlier this week that it would scale back emergency lending measures implemented during the financial crisis amid indicators that the country’s markets have begun to stabilize.
From July, the central bank will no longer offer six-month loans at its 0.2 percent benchmark rate and will no longer accept bank loans and equities as collateral, Bloomberg reports.
In October, the central bank announced plans to fire 10 percent of its workforce originally employed to assist during the financial crisis. Last year, the central bank provided lenders with two longer-term refinancing operations, following maturity extensions that were too minimal to stabilize the markets.
“The development in the financial markets and in the sector is now stable,” the central bank said earlier this week. “What’s more, use of the extended lending facilities at the central bank has been limited.”
In 2008, the financial crisis wiped out 62 of Denmark’s lenders, and the government’s decision to become the first European Union member to pass bail-in legislation further damaged the country’s banks, which saw funding costs increase, according to Bloomberg.
The European Central Bank cut interest rates in November from 0.5 percent to 0.25 percent, though Denmark central bank Governor Lars Rohde did not decide to follow. He said in September that banks no longer need longer-term loan support.