Swedish banks and firms drawn into Russian Laundromat

In 2014 a group of journalists working with the Organised Crime and Corruption Reporting Project (OCCRP) broke the story of the “Global Laundromat” – an operation whereby money was moved out of Russia between January 2011 and October 2014. Much of the money was moved out of the country via Trasta Kommercbanka in Latvia and Moldindconbank in Moldova, and investigations were subsequently launched in Latvia, Moldova, the UK and Russia.

OCCRP journalists have since gained access to information allowing investigators to track how USD 20.8 billion was moved from Russia. Detectives believe the true figure could be as much as USD 80 billion, or SKr 700 billion, according to The Guardian. As a comparison, Swedish government expenditure in 2017 is expected to be in the region of SKr 970 billion.

According to OCCRP, Sweden’s big four banks as well as Danske Bank and Norwegian DNB, are among the hundreds of banks that have processed the money. OCCRP also says that Ericsson and fastening tool company Isaberg Rapid have received money transfers of USD 1.3 billion and USD 153,000 respectively.

Ericsson says it does not normally comment individual transactions, but this was a single payment for one of its customer contracts. “We don’t know today why the payment was made by a company other than the customer, but in light of the information that has now emerged, we will take a closer look at this payment and see if we have adequate procedures and control mechanisms,” states the company.

Swedish money financing criticised project

After Donald Trump waived the requirement for the company behind the controversial oil pipeline in North Dakota to consult the indigenous population again about the environmental impact on their water, the tribe is being removed from protest camps at Standing Rock.

SvD reports several Swedish banks and fund companies, including Skandia, Swedbank and Länsförsäkringar, have invested in the company. Länsförsäkringar is trying to get the company to reroute the pipeline while Skandia’s sustainability analyst Helena Larson says Skandia is waiting for a UN special rapporteur to determine whether the rights of the indigenous population have been breached.

Meanwhile Nordea has recently stopped its fund managers from investing in the company and SEB’s fund company has sold its holdings although still has holdings via its index funds.

Banks prepared to lend more

Three of four Swedish bank managers expect to increase lending to companies this year, according to Almi’s coming Lending Indicator. Carina Nordström, head of business areas at Almi, says, “It is very positive that the banks have a bright outlook for 2017.” She also points out that Almi’s lending reached record levels in 2016, mainly to innovative growth companies.

However Günther Mårder, CEO of the Swedish Federation of Business Owners, believes that although many expect credit growth because the Swedish economy is strong, lots experience difficulties with banks and the smallest companies are finding it the toughest.

Raised capital requirements for banks

Yesterday the Swedish Financial Supervisory Authority (Finansinspektionen) suggested further tightening of the requirements on banks’ lending to corporates, putting more pressure on the banking sector.

The new rules entail raising the risk weight for corporate lending, which will mean that the average risk weight is expected to exceed 30%. The risk weight determines how much capital the bank must have as a buffer for each krona loaned.

The news hit Handelsbanken in particular, whose shares closed at a minus.