NewEurope: Sweden determined to preserve high capital ratios

20 May 2013

Swedish Finance Minister Anders Borg said he was determined not to succumb to pressure from banks or the EU to lower capital ratios, and insisted that they have to remain higher compared to other EU countries.

The Swedish government’s decision to preserve high capital ratios has been worrying some of the country’s biggest banks, since it might have negative effects on their ability to lend money. In particular, Nordea Bank AB (NDA) CEO, Christian Clausen, has repeatedly warned that without harmonised capital rules, distortion of competition in the banking sector is a given. Clausen, who is also president of the European Banking Federation, stressed in February that banks need “one rule book".

The UK is also supporting the Swedish government’s decision to preserve high capital ratios, calling on the EU to give Member States the freedom to set their own capital rules. In February, Chairman of the UK’s Financial Services Authority, Adair Turner, said that setting individual standards is each country’s “right". He also added that countries setting their own rules will “get advantages from it in the longer term, rather than disadvantages".

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