The loss was discovered in the first week of January, said Nordea's head of corporate and institutional banking, Tom Ruud. "It is related to our dynamic structured bond, which is a stock-market index-linked bond. It is dynamic because we reposition the hedge from time to time." In early December, the trader responsible for renewing and repositioning the bank's hedge mis-registered the hedge. His mistake went unnoticed by the bank during end-of-day checking and for several weeks thereafter. By the time it was discovered, the rising market meant that netting out the position cost the bank €20 million. The loss will be reported in the bank's fourth-quarter results.
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