The grand national bank of Norway, DnB NOR, have done it again; five Norwegian fish exporters is filing for bankruptcy after buying structured foreign exchange products from the bank as hedge against losses. Over the last two years four small towns and over 150 000 private investors have lost all their money after buying complicated derivatives from DnB NOR.
“I had a fucking bad Christmas. There was a lot of aquavit.”
Geir Børre Johansen
Several exporters of dried fish in Norway have bought foreign exchange products from DnB NOR as a hedge against losses. Now, five companies are out of business, the Norwegian news paper Dagens Næringsliv reports.
Many exporters of dried fish in the Lofoten area in northern Norway feared currency losses last year and thought they could secure their income with foreign exchange products from DnB NOR Markets.
Instead they are left with heavy losses, and several are already bankrupt, the Norwegian news paper writes.
DnB NOR Markets have earned more money on foreign exchange market than ever.
“This is miserable bank craftsmanship,” Professor Thore Johnsen at the Norwegian School of Management (NHH) says.
He thinks DnB NOR have behaved irresponsibly towards the fish exporters.
“The agreement that this is a hedging product is quite incomprehensible. It is an extreme speculation in the euro exchange rate. The bank provides the companies with an opportunity for disaster,” Professor Thore Johnsen says.