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Nordea move to Copenhagen would not threaten Demark's financial stability -minister says
May 24, 2017 / 5:07 PM / 4 months ago

Nordea move to Copenhagen would not threaten Demark's financial stability -minister says

COPENHAGEN, May 24 (Reuters) - Nordea, the Nordic region’s biggest bank, would not pose a systemic risk to Denmark’s economy if the Swedish bank decided to move its headquarters to Copenhagen, Denmark’s business minister told Reuters.

Nordea is considering a potential move to Copenhagen if the Swedish government goes ahead with plans to increase fees banks in Sweden pay to a fund designed to protect taxpayers in a financial crisis.

“Should Nordea decide to move to Copenhagen, I am not the least worried for the financial stability or that such a decision could involve a bigger systemic risk to Denmark,” Brian Mikkelsen said on Wednesday.

“Nordea is a well-run bank, and we have developed a set of regulations for systemic financial institutions that will take care of any serious situations that might occur”, the minister said.

Industry experts in Denmark have warned that the arrival of Nordea would mean a big increase in the size of the country’s financial sector relative to its economy.

“If the capital buffer is not big enough, it will be the Danish state and all of us, who will face a problem, should Nordea run into difficulties”, professor Jesper Rangvid told Danish daily Berlingske Tidende on Tuesday.

Rangvid chaired a commission in Denmark to look into the reasons for the 2008 financial crisis.

Sweden proposed increasing fees for its bank rescue fund after plans for a banking tax fell through.

According to a rough estimate from Nordea its contribution to the resolution fund under the new proposal would rise to around 6 billion Swedish crowns ($679 million) in 2019 from 500 million crowns in 2016.

“The government’s proposal for the new resolution fee is simply impossible for us to live with”, Nordea Chairman Bjorn Wahlroos said in March.

Denmark has no plans to raise any tax or fee for financial institutions Mikkelsen said in a speech on Wednesday, in which he also said he would examine how the burden on the sector could be eased.

A government source told Reuters that the Danish authorities had not actively tried to encourage Nordea to move its HQ to Copenhagen

“We have not done anything to persuade Nordea to come to Copenhagen, and we plan not to do so. It is totally up to Nordea to make its calculations and make its decision”, the source, who wished to remain anonymous, said.

Last week, Swedish newspaper Svenska Dagbladet reported that Nordea would take a formal decision later this month on whether to move to Copenhagen. ($1 = 6.6496 Danish crowns) ($1 = 8.6990 Swedish crowns) (Reporting by Erik Matzen. Editing by Jane Merriman)

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