With hard new regulations coming and more freedom only a short way away, Nordea Bank has decided to leave Sweden for nearby Finland. This is an example of the tax competition that states and countries should take into consideration before enacting punitive taxation on the most productive corporations and individuals in their jurisdictions. Max Colchester reports:
Nordea Bank NRBAY -0.11% AB, the Nordics’ biggest lender, said Wednesday it would move its headquarters from Sweden to Finland, which is inside the eurozone’s banking union, saving as much as €1 billion. Nordea said it would make the switch to Helsinki in the second half of next year. (Finland uses the euro; Sweden does not.)
Banks have in the past threatened to quit countries for friendlier climes but rarely go through with it. HSBC Holdings PLC, for instance, has repeatedly said it would consider moving away from London but last year decided to stay put. Nordea’s move marks the first time since the financial crisis that a major European bank has uprooted for regulatory reasons.
Earlier this year, Nordea said it was considering leaving Sweden after the country proposed increasing the fees banks pay to help cover the cost of saving them if they get into trouble. The country also has some of the strictest capital requirements in Europe. Nordea, which does business across Norway, Sweden, Denmark and Finland, said the move would save it around €1 billion in resolution fees and deposit guarantees compared to remaining in Sweden.
“We wanted predictability,” says Casper von Koskull, Nordea’s chief executive officer.
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