SCANDINAVIA- The €262bn cross-border financial services group Nordea says it wants to be a single entity within the EU or Societas Europaea (SE) to overcome the “obstacles“ posed by the different regulatory systems of the countries where it operates.
Peter Schuetze, member of the group executive management, announced the change at a conference on financial integration in Brussels.
He said it could be ”one possible solution” for Nordea, present in Sweden, Denmark, Finland and Norway to overcome the problem of paying cross-boarder VAT on internal financial services and to avoid “obstacles” posed by different legislations, regulatory systems and financial supervisory authorities of the four countries where Nordea is present.
Schuetze said: “We must continue to pursue the full vision underlying the Financial Services Action Plan: a single market for financial services, an efficient and effective regulatory s and high-performance, continental scale players.”
Because Nordea’s existing subsidiaries will be transformed in branches of the SE, the company forecasts “a major hurdle as a result of the 1994 deposit-guarantee schemes directive”.
Nordea, Schuetze explained, is currently participating through its subsidiaries in the four country’s deposit guarantees systems, which differ from country to country.
The directive requires that subsidiaries are covered by the deposit guarantee scheme of their “home” country, the so called home country requirement.
But subsidiaries are also entitled to a top-up for their deposit guarantee system, if the system of the country there are based, the “host” country, exceeds the cover of the system of the “home” state.
He said the transformation from subsidiary to branch was “a situation unforeseen” in the 1994 deposit-guarantee directive, designed to protect depositors of credit institutions in the EU and safeguard the stability of the banking system.
Schuetze explained the top-op option makes things difficult when a subsidiary is transformed in a branch and applied to Commissioner Frits Bolkenstein for a “grandfather clause” to the directive for the exemption of SEs ,formed by the merger of banks in different countries, from the current “home”country requirement for deposit guarantees.
Branches should simply continue in the local schemes.
“At the same time Nordea will ask local authorities in Sweden, Finland, Denmark and Norway for their support to avoid any market disruption and to continue on the route to become a European Company,” he said.
Nordea was created between 1998 and 2000 as Merita Bank of Finland, Nordbanken of Sweden, Unibank of Denmark and Christiania Bank of Norway merged, it has €262 bn in total assets.