Danske CEO Urges Nordic Regulators to Address 'Substantial' GapsBy and
The chief executive officer of Danske Bank A/S, Thomas Borgen, wants regulators in Scandinavia to fix what he says are “quite substantial” differences across the region.
“I have an understanding of why there are differences, because of culture, history and starting point,” Borgen said in a brief interview in Copenhagen on Monday. “But the more we can work together, the regulators can work together, the better it is for all of us.”
Regulatory gaps between Denmark, Sweden, Norway and Finland have driven the region’s biggest bank, Nordea Bank AB, to look into moving its headquarters away from Stockholm. Nordea CEO Casper von Koskull has argued the region’s only global systemically important bank would be better off inside the European banking union, of which Finland is currently the only Nordic member.
Borgen declined to comment on Nordea, but said that banks operating across Nordic borders face several regulatory challenges.
“We can see as a Nordic universal bank that’s operating in all the Nordic countries that there are in certain areas substantial differences which we should look into how we can harmonize more,” he said.
Borgen said the U.K.’s departure from the European Union adds to the urgency of creating a harmonized and more aligned regulatory bloc in the Nordic region. Brexit will mean the loss of an ally that has traditionally acted as a counterweight to an EU dominated by euro nations, he said.
At Nordea, Chief Risk Officer Julie Galbo said the bank “can see several advantages of being under European oversight” in the banking union. Regulation would be more predictable, and being under the same framework would “increase trust and transparency” in the bank, she said. Nordea has said it will be ready to announce a decision on its domicile next month.
The head of Sweden’s Financial Supervisory Authority warned banks should be careful what they ask for.
Erik Thedeen, director general of the FSA, said while local tradition and legislation remain obstacles to harmonization, supervision is gradually converging, starting a “very harmonized overall regulation” in the EU. A memorandum of understanding among Nordic FSAs regarding branches is another step, he said in an interview Wednesday at a Stockholm sustainable finance conference.
Yet, “it’s not necessarily always the case that the banks will be satisfied if you do this,” Thedeen said. “An individual bank in an individual country” may instead regard harmonization “as a worsening” of the regulatory environment.
— With assistance by Niklas Magnusson