(mostly interesting for Danish & EU citizens )
You can easily be very rich
Very rich – but not have a penny (in cash)…. I’m in that situation – but don’t worry about me. Worry about your local society – your country.
In Denmark we have seen the most insane example – and I have to say that I have very little hope for democracy when the people who want to spend there seems to be lame….
Stupid Fuck Up With Good Intentions
How did ATP (one of the largest pension funds in EU) and PFA (also pension fund) end up turning FIH Erhvervsbank (our only aggressive commercial bank – or should I say: The only hope for any growth in GDP) – into a financial disaster when the business case made so much sense?
Entrepreneurs Needs Banks
Specially real entrepreneurs who made revenue and have to finance growth:) – But remember that funding is crucial to banks especially when having a deposit deficit. To get this banks needs a good credit rating which it the case for most major Danish banks. Small banks typically have lower ratings but this is not a big problem as these banks are primary funded via deposits.
This was where FIH was failing a year ago when ATP and PFA took over – led by the absolute smartest guy I know living in Denmark: Mr Graven (clunky name :). FIH had a major deposit deficit (read not any significant deposits at all) and one of the worst ratings in the Danish banking sector at all. Therefore the bank had no chance of paying back the loans provided by the government. (Thank you Lille Lars & Helle).
Really Responsible People
Then ATP (the motherfu… large pension fund) comes in to the picture as one of the strongest financial institutions in Denmark. They took over FIH, put my hero, Bjarne Graven in to run it and the business case was crystal clear. Suddenly I had a little hope for the future. Backed by ATP – the FIH would improve its credit rating – giving access to funding and the bank would be back in business. Who would it benefit? Investors in ATP (meaning literally everyone in the country) and the entrepreneurs and corporates lending money from FIH, which again has a positive spin off effect on the Danish society. That makes sense! I was so happy and proud to see that NOT ONLY DOES ATP – make one of the best returns in the world – they are also taking care of the business climate – despite a 3 year long winter. And Mr Graven – could prob have gone to any international bank and gotten 8-10mio€ a year – but he did a noble choice (prob because the wife and the kids didn’t like to move to NYC/London/Sing)
Then Someone Fucked Up
But what happened? FIH did not get the rating lift and ended up reducing corporate lending in such a brutal way that the Danish government now has intervened to make sure that FIH does not put Danish corporates out of business. That is crazy. What appeared to be a win for everyone (except the other banks fearing the competition) has ended up being a disaster and the government is now paying. Why did this happen – how could the political system lets this happen – while picking up the check from a endless number of banks going bust. why Why WHY – when we need it. Someone has to go in here and get it right. Our former prime minister – and a very smart man (who unfortunately went on an insane crusade against capital fund structures) – Mr Nyrup should put on his biking helmet – and start the bike now!!!
The question is why?
My guess is that once again the Danish financial legislation and bureaucracy shows its ugly face and kills a good initiate and destroys value for everyone! Cooooome on – The result is that ATP has not been able to give FIH the financial backing need for improving the credit rating.
It is time for a change even though I find it hard to see who will drive this!? Could we please redirect the outsourcing from the frozen cartoon figures in EU – to my friends and partners in Singapore?
NOTE TO SELF: Im writing all this boring stuff – because Tradeshift & My New Project can help Entreprenuers…