Swedes propose EU debt crisis solution: report

Swedish politicians are reported to be behind a proposal to allow the European investment bank (EIB) to play a key role in the rescue of troubled European banks, according to the German Financial Times on Thursday.

According to the paper, the proposal has been presented by Swedish representatives, although Minister of Finance Anders Borg declined to comment on the report.

At the Economic and Financial Affairs Council (Ecofin) meeting in Luxembourg this week, other measures to strengthen the banks’ capital structure were also discussed.

One was to radically expand the European Financial Stability Facility (EFSF) emergency fund by allowing it to act as a bank and take out its own loan from the European Central Bank (ECB), and in that way finance support efforts.

Since then the board of the European Banking Authority (EBA), has started to plan for new stress tests of the European banks, to account for the massive devaluations of government bonds from the countries in crisis.

The EBA stress tests carried out last summer, showed that the European banking sector was in need of a €2.5 billion ($3.3 billion) cash injection, and these tests were confined to the smaller banks.

However, according to the European head of IMF, António Borges, the deficit in capital is closer to €100-200 billion, and analysts say it could be even more.

Analysts at American financial services firm, JP Morgan, point out that several major banks as being the most liable: Belgian KBC, German Commerzbank, Italian Unicredit, Brittish Barclays, French Societé Générale, German Deutsche Bank, as well as Austrian Raiffeisen Bank International.

In the US, major bank Morgan Stanley has also had to face the heat as a result of the exposure to the dept crisis in the Eurozone, and the European Commission now want a coordinated effort to support the banks in the union.

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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”.