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NORDEA

Nordea CEO: Let banks fail

Christian Clausen, the CEO of Nordic banking group Nordea has spoken out against state bail outs of troubled banks, arguing that they should be allowed to fold.

Nordea CEO: Let banks fail

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.

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BANK

Police to investigate Nordea bank over money laundering

Danish police will investigate the Swedish bank Nordea after a year-long probe by regulators into money laundering led to "criticism" of its procedures, the bank said Friday.

Police to investigate Nordea bank over money laundering
Photo: Marcus Ericsson / TT

Detectives will examine how money laundering rules were followed at the bank's Danish subsidiary and could result in “sanctions”, Nordea said in a statement.

“We realize that we initially underestimated the complexity and the time it takes to change our procedures,” said Nordea chief executive Casper von Koskull.

The bank added that 850 Nordea employees are currently involved in the fight against money laundering which the bank plans to increase to 1,150 by the end of the year.

In May 2015 the bank was fined 50 million kronor (€5.4 million euros) – the maximum possible – by Swedish regulators who accused Nordea of “not following money laundering rules for several years” and failing to “evaluate the risks of (doing business with) certain clients”.