• Sweden edition
 
Nordea CEO: Let banks fail

Nordea CEO: Let banks fail

Published: 24 Aug 2010 17:35 GMT+02:00
Updated: 24 Aug 2010 17:35 GMT+02:00

Speaking in an interview with Danish magazine Lederne, Clausen divides responsibility for the fall out from the finance crisis with politicians, the banks themselves, and their customers.

"The bad banks should be allowed to go bankrupt, and customers should have been affected. This has just not been politically acceptable, as it would have affected the customers," Clausen said to the magazine.

But Clausen said that the consequences would be the same as for customers of businesses in other sectors, such as airlines or construction firms, which would not be saved by the state.

"The discipline required in choosing a bank you have faith in has been removed due to the principle of being 'too big to fail'," adding that he hoped that international regulation would continue in the direction of allowing troubled banks to fail.

Clausen said that while Nordea was not responsible for the crisis, it would do its bit to ensure that there would be no repeat.

Nordea, formerly Nordbanken before it merged with Finnish Merita in 1998, was bought by the state-owned PK-Banken in 1990 after falling victim to the financial crisis in Sweden 1990-1994, receiving 63 billion kronor ($8.4 billion in today's money) in state support.

The Local (news@thelocal.se)

Your comments about this article

18:07 August 24, 2010 by krow
This guy is talking from ALL four corners of his mouth. Had the swedish government not bailed Nordea bank even though they own the bank, you would not have been CEO today
18:28 August 24, 2010 by Taxalien
@krow: What a pointless comment.

Clausen was made CEO in 2007. Nordea was bailed out during the 1990s.

Clausen is not alone in speaking up to say what a few economists have said for decades. Bank must and should fail if they are not solvent.

The reason why it doesn't happen in Sweden is because we have a political nobility as well as a corporate nobility who run the country and who need each other to avoid making it obvious that they are both failures that rely on an increasing underclass of Swedes who don't have a share in the surplus that AB Sweden is producing.
22:17 August 24, 2010 by Mib
I agree...let banks fail...but with a proviso. They must follow stringent regulations to seperate the investment banking from the retail part. they must retain enough money to deal with normal downturns. The banking sector must be opened up to allow fair competition and all staff who receive bonuses should be paid in shares or paid when it is shown that the bank made REAL profits over a 10 year period. In the event of a bank failing/massive losses....the higher management relinquish any contractual compensation in the event their contract is cut short.

So, in essence...run the banks for the customers and not for speculators!!Simple really.

Just an aside.....the specualtors in the commodities market have driven food prices up, which is helping to cause hunger in parts of the world including Niger. That is scandalous and must be stopped. A dying child has more right to food than a banker to their bonuses!! Simple really!
00:24 August 25, 2010 by frey
would someone please tell me who caused the "quant quake" in july of 2007? ( somebody(s) dumped their mortgage securities position). was it that egg head simon over at rennaissance technologies; or was it the british, swedish, and thai's sticking it to new york over the previous currency episodes; or maybe it was trow? any ideas? but to get on topic, lehman brothers was allowed to fail, and look what happened.
02:39 August 25, 2010 by rabbemos
@taxalien Good Points.
09:32 August 25, 2010 by RobinHood
# Frey

Your excellent question will be debated for years to come, and like the causes of the first world war, the answer is: lot's of different things all coming togethor at the same time, some things more important than others. The debate will be about what where the most important factors, and no one will ever agree what they were.

My sixpenth worth is "uncontrolled greed" sums it up.
13:01 August 25, 2010 by Taxalien
@RobinHood:

The problem is not capitalism but the absence of it. The worst enemies of capitalism is not socialists but capitalists. All capitalists who have made it to the top love socialism. It is the moat around the castle. It keeps everybody else out.

If you really thought any different then explain after 77 years of socialdemocracy in Sweden we now have 1% of the population owning 40% of all capital.

@Mib:

I don't have an issue with the bonus culture. If banks were allowed to fail most would be stone dead right now. I can only imagine maybe 5 or so surviving (like Orust or Tjörn bank) and none of those are on the high street.

In a planned economy wealth is distributed unequally with a preference towards the planners. Just like the Sovietunion. This is the point Beng Ericson is making in his book "Den nya överklassen". http://www.dn.se/dnbok/bokrecensioner/bengt-ericson-den-nya-overklassen-en-bok-om-sveriges-nya-ekonomiska-elit-1.1158003

That book and Anders Isaksson's "Den Politiska Adeln" is really all immigrants should be forced to read before they start telling everybody how fantastic Sweden is. Because it is not so fantastic if you understand what it really is all about and where Sweden derives its ideals from.
14:35 August 25, 2010 by blik
Its all about ballance. There should be a mixture of regulation that protects consumers and Capitalist princaple that allows the rotten to die.
15:51 August 25, 2010 by Liquidmonkey
YES, let them fail, greedy bastards.

if banks actually gave back to their customers i might feel sorry for them but all banks do is take take take and the charge the customer a fee FOR EVERYTHING!!

banks use YOUR MONEY to get rich but yet we don't even get interest anymore.

disgusting.
17:47 August 25, 2010 by BobYourUncle
Spot on, the 'lauded' 3rd way is the biggest scam to keep the working class believing in socialism to benefit the capitalists at the top. I have been stating this for years and it is welcoming to see someone else mention it.
18:00 August 25, 2010 by GefleFrequentFlyer
I think the underlying problem here is that people and consumers are basically braindead and unable to make a informed decision themselves, therefore the goverment has to nannystate for them.

Case in point: Like Mr. Nordea says, customers should investigate the strength of their bank on a regular basis, and not put all their eggs in one basket. He is 100% correct that we should let banks fail. It'a about choice. If you don't like ICA's meat, don't shop there. Vote with your wallet, same as you choose a bank. If you don't like Nordea, Swebank, start your own bank if you think you can do it better. Until then, stop complaining and remain the lemming that you are.

Sadly, society today has devolved to the point where people expect the goverment to protect them from any hardship. Thus, the political pressure for bailouts.
Today's headlines
Royal family
Princess Madeleine to make Nobel comeback
Princess Madeleine at a previous Nobel banquet. Photo: TT

Princess Madeleine to make Nobel comeback

Sweden's Princess Madeleine is scheduled to appear at the Nobel Festival in Stockholm in December, after taking time out from her royal duties to focus on looking after her daughter. READ  

Politics
'We knew that Israel would be critical'
Foreign Minister Margot Wallström (left), with Sweden's Prime Minister Stefan Löfven. Photo: TT

'We knew that Israel would be critical'

Sweden's Foreign Minister has told The Local she respects Israel's decision to recall its ambassador after Sweden officially recognized the State of Palestine, and laughed off comments about IKEA furniture made by her Israeli counterpart. READ  

Analysis
'Store up your sunlight hours before winter'
Doctors say we should make the most of the autumn sunshine. Photo: Shutterstock

'Store up your sunlight hours before winter'

Spending time outdoors this autumn will help you survive a cold, dark Swedish winter. Baba Pendse, Head of Psychiatry at Lund University shares his top tips for battling the seasonal blues with The Local. READ  

Sports
Plot for shared Scandi Winter Olympic bid
Skiers hit the slopes in Åre, western Sweden. Photo: TT

Plot for shared Scandi Winter Olympic bid

Norwegian sports officials have said they want to co-host the winter Olympics with Sweden in 2026. But there has so far been no official response from Sweden. READ  

National
Anti-Israel graffiti 'not a race crime': Court
Photo: TT

Anti-Israel graffiti 'not a race crime': Court

A teenage boy who painted anti-Israel slogans and symbols on the Concert Hall in Gothenburg has been convicted for the damages he caused, but he walked free from racial agitation charges. READ  

Entertainment
A closer look at Sweden's rising stars
Swedish actresses Sandra Huldt and Julia Ragnarsson. Julia (right) has been nominated for a Rising Star award. Photo: TT

A closer look at Sweden's rising stars

Like to be ahead of the game when it comes to the next big thing on the silver screen? We find out more about the Swedish nominees for the Rising Star award to be presented at Stockholm's International Film Festival next week. READ  

Science
Swedish women in two-year sex pill study
Contraceptive pills have been linked to mood swings. Photo: Shutterstock

Swedish women in two-year sex pill study

Three hundred women from across Sweden are taking part in a study designed to demonstrate that modern contraceptive pills don't lead to decreased libido or mood swings. READ  

National
Stockholm 'sinking' oil spill ship safe
The ship was rescued on Thursday. Photo: Swedish Coast Guard

Stockholm 'sinking' oil spill ship safe

After fears a ship carrying around 52 tonnes of oil could sink in Stockholm's archipelago, Sweden's Coast Guard said the vessel had been towed to safety. READ  

National
Dog attack policewoman acquitted on appeal
A scene from a video of the attack published by Dagens Nyheter

Dog attack policewoman acquitted on appeal

A policewoman accused of letting her dog attack a drunk man while she repeatedly hit him with a baton, has had her conviction overturned by a court in Stockholm. READ  

Entertainment
What's On: October 31st - November 7th
Uma Thurman will soon be on her way to Stockholm. Photo: TT

What's On: October 31st - November 7th

Halloween fun and an international film festival are the big events hitting Stockholm this week. We cast our eye over the capital and the rest of the country for the best activities to check out this week. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Lifestyle
Stockholm's shocking take on Halloween
Sport
Top ten quotes from Zlatan Ibrahimovic
Business & Money
Get your own office in Gothenburg or Stockholm - free for a day
Gallery
People-watching: October 30th
National
Sweden remains fourth best for gender equality
Blog updates

31 October

Editor’s Blog, October 31st (The Local Sweden) »

"Hello readers, Welcome to our latest 60-second round-up of the week’s news. First, Sweden made headlines around the..." READ »

 

29 October

Scariest day (Blogweiser) »

"This is what’s frightening me on Halloween. http://www.youtube.com/watch?v=D4OFZVCu8J0&list=UUJu5J7jG4uoYSjWbpFsJBuQ Follow my posts on FB. ..." READ »

 
 
 
National
Timeline: Julian Assange sex allegations
Sport
World Cup ski race on 'fake' Stockholm slope
Society
An Arctic tradition: hunting and handicraft
Society
Stockholm taxis offer free therapy sessions
National
The Local meets Health Minister Gabriel Wikström
Gallery
Property of the week: Österåker
Society
Homeless turtles get Stockholm police ride
National
Construction worker has 'Sweden's best beard'
National
Italian musician jazzes up Sweden's Lapland
Gallery
Zlatan's career in pictures
Finest.se
Gallery
People-watching: October 25th and 26th
Lifestyle
'Swedes are funnier than they think'
National
Swedish town 'like Venice' after heavy rains
Lifestyle
What's On in Sweden: October 24th - 31st
Gallery
People-watching: October 22nd
Gallery
In Pictures: Prince Carl Philip and Sofia Hellqvist
Lifestyle
Eight things to love about renting a Swedish apartment
National
Vasa ship cannon blasted in Sweden
National
Sub hunt: Day-by-day
National
Sub hunt: Stockholm islanders share their fears with The Local
Sponsored Article
The best options for oversea transfers
National
Dentist gives free care to Roma beggars
Gallery
Property of the week: Malmö
Gallery
PHOTOS: 'Foreign activity' in Swedish waters
TT
Society
QUIZ: How good is your Swedish?
Society
The nudity... and nine other things expat men notice in Sweden
Gallery
People-watching: October 15th
Gallery
Your views: Should outdoor smoking be banned in Sweden?
Business & Money
Sweden has 'large hole' in finances
Sponsored Article
Introducing... Finding a job in Stockholm
Society
Monster salmon caught in northern Sweden
Gallery
Property of the week: Lorensberg
National
Scandinavia's child bride
National
Ebola crisis: How is Sweden preparing?
Business & Money
How Sweden is becoming a cashless society
Gallery
Stockholm Burlesque Festival 2014
National
How a little red horse became a symbol for Sweden
Gallery
People-watching: October 12th
Business & Money
The hottest start-ups from southern Sweden
National
Stockholm is 'best' region for well-being
Sponsored Article
How to catch the first lobster of the year
Team SCA
Sponsored Article
All-female SCA team takes off on Volvo Ocean Race
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

989
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN