Monday, November 3, 2008

A crisis' real world example in Denmark's small communities

This Bloomberg article addresses the impact the credit crisis has on community life in Denmark, where local banks traditionally provided funds to sponsor sports and cultural centers. The country has more banks than any other country in the EU. On average 33 lenders serve 1 million residents. This is changing rapidly in the current crisis and smaller banks get swallowed up. Funds for sports and cultural centers, swimming clubs, local fishing clubs, sailing and soccer clubs are now drying up.

from Bloomberg:
When Danish bank Ebh Bank A/S succumbed to the financial crisis six weeks ago, the fallout didn't just affect customers and clerks. Artists, musicians and swimmers also suffered.

On the day Denmark's central bank was forced to bail out the 110-year-old lender, Ebh Bank yanked sponsorship of a proposed sports and cultural centre in its home town of Fjerritslev, a few miles inland from the North Sea.

``We put the project on hold immediately,'' said Egon Korsbaek, chairman of Ebh, based 150 miles northwest of Copenhagen. ``We've supported large and small projects. We don't think we'll be able to continue with the bigger ones.''

Danes have three times more banks than the average European and the institutions are the biggest backers of sports arenas, fishing clubs and museums in small towns. Sponsorship is now under threat as Denmark becomes the first European economy to enter a recession. Eight banks have collapsed or were rescued or bought since the seizure in credit markets started last year.

Roskilde Bank A/S, rescued by the central bank in August in Denmark's first such bailout in more than a decade, will allow 25 ``major'' sponsorships to run out, spokesman Stig Bo Jensen said.
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source: Ebh Bank, Sydbank Desert Denmark's Athletes Amid Credit Crisis

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