This report from the Regional Consultative Group (RCG) for Europe considers the experience of cross-border regulation and crisis resolution in the Nordic countries. It finds that the Nordic banking system is highly integrated and may provide an example of how cross-border banks may influence the interaction between national authorities. The merger of four large national banks into the Nordea bank in 2001 led to a phase of enhanced cooperation on cross-border regulation and crisis resolution among the Nordic central banks and supervisory authorities. Several Nordic Memoranda of Understanding (MOU) on financial stability were completed in the following years. A broader MoU focusing on crisis management and also including the ministries of finance was signed after the 2008 crisis based on the then agreed European Union MoU for cross-border banking groups. The implementation of the Basel III framework subsequently led to enhanced cooperation on reciprocity arrangements.
This report presents some key facts about the Nordic experience and the challenges faced by the national authorities. Overall, the countries have found pragmatic solutions when needed. Some efforts to enhance cooperation have failed due to diverging national interests, in particular as regards managing and resolving crises in cross-border banks. The report also highlights some remaining challenges related to the European Banking Union, systemically important branches and crisis management and resolution.
This document has been prepared by the FSB RCG for Europe and is being published to disseminate information to the public. The views expressed in the document are those of the RCG for Europe and do not necessarily reflect those of the FSB.