With the uphill task of establishing public confidence in the financial sector on its mind, the Danish regulator Finanstilsynet has unveiled a new seven-point plan that it hopes to accomplish by 2020.

Its first aim is 'supervision in good times,' a brave show of faith in the return of economic good times that it does not attempt to justify once in its plan. Indeed, its document always refers to 'the financial crisis' as though it were over. No mention is made of today's currency wars (in which countries are conducting competitive currency devaluations to gain trade advantages over one another, with even the cautious Swiss being drawn in) or the world's mounting sovereign debt crisis. The document never mentions the words 'sovereign' or 'debt' and its only mention of currency occurs in a note about new methods of payment and virtual currencies.

Instead, the regulator has lowered its sights and concentrated on the efficiency of capital markets - another pillar of its strategy for the future. It looks forward to new European Union rules that consist of four legislative instruments:

• the Market Abuse Regulation (MAR);
• the Markets in Financial Instruments Directive mark 2 (MiFID II);
• the Markets in Financial Instruments Directive (MiFIR); and
• the regulation on central securities depositories (CSD).

The regulations aim at protecting investors from sharp practice and increasing trading transparency, extending the hand of regulation to cover more markets, firms and instruments.

A further 'focus area' of regulatory policy is supervision with a systemic perspective. High-net-worth depositors appear to be in the firing line here. The Cypriot financial crisis, in which the European Central Bank allowed Cypriot banks to recapitalise themselves 'from within' by plundering the contents of HNWs' accounts (depositors with more than €100,000 in their accounts, plus bondholders) while remaining safe from prosecution or lawsuits, stands as a model for the way in which the EU is likely to react to further bank failures in other countries.

These 'bail-ins,' a term devised by the Economist magazine, are a far cry from normal bankruptcy proceedings where strict rules apply and a court-supervised process ranks creditors in order of repayment precedence, with creditors in each group being treated equally; Forbes contributor Nathan Lewis has described them as "another crony bankster scam."

Lewis has written: "The difference with the 'bail-in' is that the order of creditor seniority is changed. In the end, it amounts to the cronies (other banks and government) and non-cronies. The cronies get 100% or more; the non-cronies, including non-interest-bearing depositors who should be super-senior, get a kick in the guts instead."

In Cyprus, HNW depositors saw 37.5% of the value of their uninsured deposits converted to equity. Financial institutions (e.g. German banks and central banks including the Bundesbank), along with government entities, received full repayment.

Heated debate, therefore, surrounds the subject of bail-ins, with the EU coming down strongly in their favour. We see an echo of this in the Danish regulatory plan, which states (not on the subject of HNW bank accounts but on the adjacent subject of pensions): "The EU crisis management directive established that creditors, not taxpayers, should bear the losses of bank crises. In the pension system, guaranteed interest rate products now dominate less than unit-linked products. The individual pension saver thus now directly carries the investment risk."

This is Denmark's vision for the future of HNW investments. Another part of its vision is a stepping-up of surveillance. It states: "Supervision with a systemic perspective significantly increases the need for data and analysis capacity, as the analyses required are complicated and data-intensive. Some of the new financial players (e.g. peer-to-peer lending) are only to a limited extent subject to financial supervision. Despite this, data collection and analysis must ensure that the Danish FSA has a sense of any systemic risk, and is in a position to raise awareness if these players’ activities develop in this direction."

As the Danish FSA is funded by financial companies that pay it fees, the cost of this will be passed on to the industry at large.

The next area of focus is on technology, cyber-risk and new business models. The regulator already carries out IT on-site inspections of selected financial corporations and infrastructure corporations, including data centres and is promising no additional plans for the future apart from greater co-operation with the central bank. It does not explain its commitment to "understand the changes in technology-based business models and how these fall within the scope of regulations" in further detail.

Another future area of regulatory endeavour is the FSA's long-standing aim of protecting investors from sharp practice, or from their own ignorance. The Danish FSA promises to keep looking at the knowledge and interest of consumers; information and advisory services; and products and conditions.

The next policy concerns the safeguarding of Danish interests in international fora. This seems to be limited to in-fighting with other countries during the EU regulatory or legislative process. The paper tells a potted story about the regulator's success in lobbying the European Central Bank to secure a good deal for Danish mortgage-credit bonds in respect of liquidity coverage ratio regulations. Otherwise, it looks forward to greater standardisation among EU countries in the ways in which they obey EU laws.

The regulator has also expressed a desire to prevent banks and other institutions more effectively from use by money launderers and the financiers of terrorism. It is going to "intensify enforcement and inspection," especially at traditional financial corporations such as private banks and money transmitters. Virtual currencies will receive more attention than heretofore and there will be more AML guidelines. The FSA also wants board members at banks to pay more attention to the problem. It also expresses the routine desire to co-operate more closely with other governmental agencies such as the Public Prosecutor for Serious Economic and International Crime, the Danish Business Authority and the Central Customs and Tax Administration (SKAT).

The paper also contains an interesting reference to that eternal bugbear of regulators - their inability to pay good staff members the same wages as the private sector. In its policy document, the Danish FSA bemoans the fact that it has spent large sums on training good supervisory officers up, only to see them leave for jobs at banks. Staff turnover is accelerating because the financial sector is spending more money on hiring.

To counteract this, the regulator proposes to 'foster' workflows and process understanding to increase the impact of supervisory work, to make it easier to be a new employee and to get the most from the full competences of the organisation. It wants to 'intensify' its measurement of the effects of supervisory work. Readers can make of this what they will.

Things do not seem as bad as they might be, however. In 2015, the paper states, employee turnover was 20%; before 2008 it was almost 30%.

The Danish financial sector includes almost 350 corporations, which together employ about 60,000 people. The Danish FSA has about 320 employees and is an agency of the Ministry of Business and Growth.