Banking union protects taxpayer money

Finland’s membership in the European Banking Union would keep our taxpayers’ money safe if Nordea were to land in trouble, writes Director General Leena Mörttinen of the Finnish Ministry of Finance. Mörttinen continues by saying that we can happily welcome Nordea to Finland because the bank is in good financial shape.

Nordea’s move to Finland does not significantly increase risks in our banking sector although it does grow the sector considerably in size, writes Mörttinen in her column. She also points out that Finland’s membership in the Banking Union takes risks off taxpayers and transfers them instead to investors.

Mörttinen would like to see the European Deposit Insurance Scheme implemented but adds that risks involved in our current national deposit guarantee scheme are minor. Finance Finland (FFI) supports the harmonisation of the various deposit guarantee schemes in the euro area, but sees no possibilities or need for a European scheme.

Mörttinen concludes by remarking that legislators and supervisors should not let Nordea’s healthy situation cloud their judgement. “A large bank entering our market increases our financial system’s risks. This is something we should be aware of and prepare for.”