Finland welcomes banking giant Nordea but move holds risks

Helsinki

BANKING giant Nordea's decision to move its headquarters to Helsinki is being heralded in Finland as the ultimate endorsement that a long-lasting economic downturn is finally coming to an end.

The Nordics' biggest bank is set to become the largest company run out of Finland when it moves next year, overtaking fallen telecom giant Nokia in market value.

"There will be a lot of potential. We could get new players to the industry as we have a large bank that aims to grow internationally," said Finance Minister Petteri Orpo. "I think this has a big symbolic significance for all of us." But the move also has dangers.

It will make Finland the smallest country in the world to host a bank classed by regulators as systemically important globally and bring with it a balance sheet of about over 600 billion euros (S$965.5 billion), close to triple Finland's annual economic output. That leaves Finland at risk of a major economic hit if the government were ever cal…