Finance Minister Anders Borg of Sweden said that his country’s government will never agree to allow its taxpayers’ money to bail out “ill-managed” European banks.
Bloomberg reported Friday that Borg characterized the proposed European banking union structure as “unreasonable,” adding that Sweden would never accept a framework that allowed eurozone banks more influence in such a union than European banks in countries outside the currency bloc, like itself.
Sweden is the largest economy among Nordic countries, and has been diligent about protecting its own fiscal health. Surrendering control and influence to a broader authority has been a sticking point for the financially stronger countries in Europe and also within the eurozone.
“The European Banking Authority, the European Central Bank (ECB) would automatically get a majority,” Borg said in the report.
He added, “This entire regulatory framework that we’ve built up in the last few years is based on that when different countries get into a conflict, different banks get into a conflict, there will be mediation. You can’t leave that to an institution where the ECB and the euro countries have an automatic majority.”
Sweden has advocated tougher capital standards on its own banks after losses the industry incurred in 2008 an 2009 after expanding into the Baltic states. Borg said that Sweden would not accept European Union (EU) rules that would offer any kind of obstacle to such regulations.
“We’ve worked hard to raise capital coverage requirements on Swedish banks,” Borg was quoted saying. “We’re not prepared, through the back door, to allow the French and others who were skeptical of this to undermine that deal and decide that it’s only the ECB that can decide capital coverage requirements.”