Decision that Københavns Andelskasse is likely to fail

The Danish Financial Supervisory Authority (the Danish FSA) completed an inspection of Københavns Andelskasse during june and august 2018. The inspection included all the main areas of risk including anti-money laundering (AML). During the course of the inspection the Danish FSA observed a signifi-cant amount of breaches to the financial regulation and AML-regulation.

The inspection revealed that Københavns Andelskasse breached regulation on all areas included in the inspection. The Danish FSA observed that Københavns Andelskasse in several instances had breached the same regulation as observed during previous inspections. Furthermore the Danish FSA observed that Københavns Andelskasse could not correctly calculate it’s own funds, their individual capital requirement or their liquidity. A correct calculation of these areas is crucial for the sound operation of a credit institution.

The Danish FSA observed a significant amount of serious breaches of AML-regulation during the inspection. Københavns Andelskasse has been reported to the police on the 23rd of August 2018 by the Danish FSA due to these observations.

Considering the comprehensive, significant and repetitiveness of breaches to the financial regulation observed and taking into consideration serious breaches of the AML-regulation, the Danish FSA has made the decision that Københavns Andelskasse is likely to fail, cf. § 224 a(1)(1) of the Financial Business Act. In making this decision, the Danish FSA has also taken into consideration that the business model of Københavns Andelskasse is unsustainable.

The decision from the Danish FSA is the first condition for Finansiel Stabilitet to take a resolution action, cf. § 4 of the Restructuring and Resolution of Certain Financial Undertakings Act.

The full decision is available in Danish through the link below.

Read: Afgørelse om, at Københavns Andelskasse er forventeligt nødlidende, jf. § 224 a, stk. 1, nr. 1, i lov om finansiel virksomhed.