The move should mean easier regulation — the Swedes have imposed increasingly challenging capital requirements on banks, partly to cope with the damaging spillovers from the ECB’s monetary policy. Contributions to Sweden’s resolution fund would have also proved expensive.
But Nordea’s move does not herald a new era of regulatory arbitrage, with major banks hopping jurisdictions hoping for better treatment.
The ECB is hardly a soft touch. The creation of the Single Supervisory Mechanism in 2014 brought a new steeliness to European supervision. Nordea can indeed enjoy a “level playing field” against other European banks, but it’s not headed for free-wheeling deregulated paradise.
It will be hard others to copy the move too. Nordea is a unique creation, balanced across its region, fused out of mergers in the late 1990s. Most other big banks have a clear home market, from which they cannot easily extract their headquarters.
Nordea’s move also says little about how the UK’s banks will manage Brexit. Moving between two EU countries, one within Banking Union and one outside, is a different proposition from crossing the regulatory barriers which Brexit could create. Nordea, after unifying its subsidiaries last year, can open branches across Europe, and use passporting without hindrance.
Big banks almost never move country, and Nordea has taken a bold step which should benefit its shareholders. Customers, regulators and the market should take notice, they should not jump to conculsions.