* Small Danish bank asks to be wound up
* Cannot meet new solvency requirement
* Expects to reach deal with FSA at the weekend
COPENHAGEN, June 24 Small Danish bank Fjordbank Mors FJORD.CO asked on Friday to be taken over by government administrators and wound up after regulators ordered it to bolster its balance sheet to cover its risks.
Fjordbank Mors is the latest small Danish bank to fail in the wake of the financial crisis, the most significant of which were the 2008 collapse of Roskilde Bank and the downfall in February this year of Amagerbanken. [ID:nLDE7150IB]
The request to be taken over by administrators came after the Danish Financial Supervisory Authority (FSA) instructed Fjordbank Mors to make more writedowns and raise extra capital to cover its risks following an inspection.
"The FSA has today put forward a demand for further writedowns and set a new individual solvency requirement which means that the bank can no longer continue its business," Fjordbank Mors A/S said in a statement.
Fjordbank Mors said the FSA raised its solvency requirement to 16 percent from 9.7 percent, which in combination with its demand for further writedowns, meant the bank lacked 700 million Danish crowns ($132.8 million) in capital.
The bank, based in Nykobing Mors in northern Jutland, said it would let itself be taken over and wound up by Finansiel Stabilitet, the state company that manages failed banks.
It said its board expects to enter into a conditional agreement over the weekend with Finansiel Stabilitet on a transfer of the bank's assets and part of the bank's liabilities to a new bank under Finansiel Stabilitet.
It said the bank that would continue its business would, with certain restrictions, continue to serve customers and accounts and bank cards would continue to function.
Fjordbank Mors said trading in its shares and bonds on the Copenhagen stock exchange would be suspended.
The bank's stock plunged 23.5 percent on Friday before the announcement to end at 13 crowns, giving it a market capitalisation of 94.4 million Danish crowns. (Reporting by John Acher; editing by Andre Grenon)