Scandinavia, which attracted investors during Europe’s sovereign debt crisis, is now coming under international scrutiny on concern that record household debt levels from Denmark to Sweden aren’t sustainable.
Nordea Bank AB, the Nordic region’s largest lender, may have to cut its dividend and forgo its profitability target to meet stricter capital rules set to be implemented over the next three years, according to an Exane BNP Paribas analyst.
Jamie Dimon says rules for systemically important global banks that would increase JPMorgan Chase & Co.’s capital requirements by about one-third will hurt profits, investment returns and the U.S. lender’s future growth.
Denmark, home to the world’s biggest household debt burden, won’t lose its top credit rating any time soon as stable public finances and a current account surplus offset the risks, Fitch Ratings and Standard & Poor’s said.
Denmark’s $500 billion mortgage industry is looking at how to keep struggling homeowners afloat as the nation’s push into interest-only loans a decade ago now threatens a jump in losses amid rising unemployment.
Billionaire George Soros’s assertion that Denmark’s $480 billion mortgage credit system can weather any crisis better than any country where mortgages are bought and sold is proving the rule for international investors.