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Nordea moves HQ to Finland, becomes 8th 'too big to fail' bank to join the eurozone
ON Monday, the number of banks deemed too big to fail in the eurozone grew to eight from seven. The new arrival is Nordea Bank Abp, which is moving its headquarters to Helsinki from Stockholm.
The bank, whose US$670 billion in assets are more than twice Finland's gross domestic product, has made clear its move was driven by regulatory considerations and a wish to be inside the European banking union.
"We'll be in the core of Europe," chief executive officer Casper von Koskull said. "I think it's important that we also can influence Europe." Under Mr von Koskull, who held several senior roles at Goldman Sachs before joining Nordea, the bank has sold off assets outside the Nordic region, including in Luxembourg, the Baltics and Russia.
In an interview with Bloomberg Television on Monday, Mr von Koskull said that growing through European acquisitions isn't on his agenda.
"If you drive a bank for size itself, that's not a good sign, for me at least," he said. "European consolidation is something of course one follows, but it's not on our agenda for the time being."
Nordea is in the middle of a high-stakes transformation in which automated and digitised services are replacing human beings. Nordea says it needs to cut its workforce by about 6,000 people as part of this plan. Mr von Koskull has made clear he thinks the rest of the global finance industry needs to adopt a similar approach to stay competitive.
The arrival of a global systemically important bank will change Finland's financial industry significantly. Finance industry assets in the northernmost euro member will swell to 400 per cent of its gross domestic product after the move, and Nordea will replace Nokia Oyj as the biggest listed company to have its headquarters in Finland.
The financial regulator in Helsinki has had to add 10 per cent to its staff to prepare for Nordea's arrival. It will carry out about 75 per cent of the work supervising the bank even as the main responsibility for Nordea oversight rests with the European Central Bank in Frankfurt.
Bank of Finland governor Olli Rehn said Nordea's decision to move to Helsinki "must be seen as a vote of confidence in the euro area banking union'', in an interview with Finnish broadcaster YLE TV1 on Saturday. "For Finland, the euro area banking union gives us broader shoulders in case of possible difficulties and that's important,'' given how big the finance industry will be compared with the country's economy once Nordea arrives, he said. BLOOMBERG