Government backs down over banking fee

The government is backing down on the proposal to raise the resolution reserve fund fee. This is the second time in a short period that the government reverses on taxation of banks. In February, it withdrew a proposal for a new bank tax, replacing it instead with this rise in the resolution fee.

The purpose of the resolution fee is to create a buffer for any future financial crises. In its final form, presented yesterday, the original changes were either gone or had been toned down significantly.

Nordea has discussed plans to move its head office to Copenhagen or Helsinki because of the fee. However, the bank had no comment to make on Thursday.

Finance Minister Magdalena Andersson had previously commented that there are benefits for taxpayers if Nordea leaves the country. However yesterday her tone was milder, “Nordea is of course welcome to stay in Sweden and we see a significant point with having a head office in Sweden.”

Representatives of the alliance were pleased with the government’s U-turn.

Nordea has decided to move

 

The issue of whether Nordea will move its head office to either Helsinki or Copenhagen has been a hot topic since the government presented its proposal to raise the resolution reserve fee. In March Nordea chair Björn Wahlroos said the higher fee could cost Nordea an extra SKr 5 billion, motivating a move.

Svenska Dagbladet reported on Saturday that sources have now confirmed that the decision has been made and all that remains is a formal decision by the bank’s board on 30 May. However Nordea’s head of investment Rodney Alfvén would neither confirm nor deny the reports.

Dagens Industri, DI, reports today that Finance Minister Magdalena Andersson denies that the Swedish state would lose any tax income if Nordea moves its head office. Nordea pays corporate tax in Sweden for its Swedish operations regardless of where its head office is situated.