Sweden’s banks, which are among Europe’s best-capitalized, are warning that excess reserves can’t cool a property market at risk of overheating as they urge the government to address a chronic under-supply of housing.
Scandinavia’s banks are contesting a plan by the European Banking Authority that requires lenders to adopt a uniform approach when calculating capital buffers, saying the reporting rule penalizes a region that performed better than most during the global financial crisis.
Nordea Bank AB, the Nordic region’s largest lender, joined Svenska Handelsbanken AB and Swedbank AB in reporting a jump in capital ratios after profits increased, cementing their positions as Europe’s best capitalized banks.
The European Central Bank said it will use stricter rules when stress testing banks’ balance sheets next year than it will to study their assets, as it seeks to prove its credentials as the region’s financial supervisor.
The European Central Bank’s probe into the health of Europe’s banks will be more credible than previous exercises because the institution itself will have to deal with the outcome, the official overseeing the test said.
Europe’s banks need to keep dumping Italian bonds and other assets tainted by the region’s debt woes to avoid being sucked into the epicenter of the crisis, said Christian Clausen, president of the European Banking Federation.
Europe’s banks won’t cut lending to businesses or households as they adjust their balance sheets to fulfill a 9 percent capital adequacy target, said Christian Clausen, the president of the European Banking Federation.
Nordea Bank AB’s decision to avoid three-year loans offered by the European Central Bank is proving a winning strategy as investors reward the bank with lower borrowing costs, Chief Executive Officer Christian Clausen said.