The Financial Supervisory Authority (FSA) intends to ensure that Nordea’s capital requirement remains as high as it is currently, even after the bank moves its headquarters to Finland.
In an interview with Dagens Industri (DI), the head of the FSA, Erik Thedéen, says that the Finland is move is “completely unique”. “It is also the first time a large bank, with exposure to the whole of the Nordic region comes under the jurisdiction of the European Central Bank (ECB),” he adds.
He does not believe Nordea’s move is a sign that Swedish regulation has gone too far. “When you say that our requirements are too demanding, then you are forgetting that these requirements are made in an environment typical to Sweden, which is concentrated and interlinked.”
When the move is made, the FSA no longer has responsibility for supervising Nordea and it could mean a lower capital requirement for Nordea. The FSA has already started talks with the ECB and Erik Thedéen wants to push for the ECB to ensure the current capital levels are maintained.
On Thursday Nordea held a press conference at its Helsinki, which will next year host key employees who will be moved from Stockholm.
When asked why it was not enough that the Swedish government backed down over the resolution reserve fee, CEO Casper von Koskull said, “Nordea is a bank with four domestic markets. We are also a very large bank. It is therefore difficult to exist under one regulation that is based on one country.” For him it is a natural step to become part of the European banking union and be regulated by the Single Supervisory Mechanism, SSM.
He also comments that there never was any negotiation. “We have not been shopping around.” Instead the bank has carried out a thorough analysis.
Meanwhile Swedbank is in a good position to take over dissatisfied customers who leave Nordea, says Swedbank’s head of press Josefine Uppling.
Prime Minister Stefan Löfven understands that many Swedes are upset. “Here we have a bank that has twice received significant help. The whole reason the bank exists is because of Swedish taxpayers and the thanks for that is: we are moving the head office,” he says.
Social Democratic Finance Minister Magdalena Andersson said she was disappointed to hear the news of Nordea’s move to Finland but saw no reason to review government policy. The government has a responsibility to ensure financial stability and provide a sound environment for companies, she commented, pointing out that Nordea had posted a profit of SEK 40 billion in 2016.
Green Financial Markets Minister Per Bolund said there was broad political unity in Sweden not to join the banking union for the time being. However, the government had now decided to analyse the advantages and disadvantages of Swedish membership.
Ulf Kristersson, the Moderate economic policy spokesman, commented that the government, with its plans for extra regulation and a bank tax, had “undermined confidence that Sweden is a country with stable long-term regulation”.