SWEDISH

SECURITIES DEALERS

ASSOCIATION

To

European Commission

Stockholm November 13, 2013

SSDA comments on the Commission Consultation on the Liikanen report

The Swedish Securities Dealers Association(SSDA, register id 7777147632-40) represents the common interest of banks and investment firms active on the Swedish securities market. The mission of SSDA is the maintaining of a sound, strong and efficient securities market in Sweden. SSDA pro-motes members’ views with regard to regulatory, market and infrastructure related issues. It also provides a neutral forum for discussing and exchanging views on matters which are of common interest to its members. SSDA has a close cooperation with other trade associations in Sweden, the Nordic area and Europe.

The SSDA welcomes the opportunity to comment the High-level Expert Group on reforming the structure of the EU banking sector. We found the report very interesting and we sympathize with the thought of securing the depositories savings from extensive trading risks.

We agree with and support the Swedish Bankers’ Association’s response to the HLEG report. On the same time we would like to take the opportunity to stress a few points that we find important for the Securities Dealers in Sweden.

Our Key Points

  • The sometimes high portion of HTF and AFS in the balance sheets of the Swedish Banks is not a sign of high market risk. The holdings are due to the structure of the Swedish bond market where the banks have sometimes large inventories but the positions are hedged to a very large extent. The large holdings make the bond market more liquid and it helps to fund the debt of the government and the mortgage institutes. If the costs for this holdings will increase it will hit both the customers and the tax payers.
  • Even if the Swedish banking market in relative terms is fairly big it is still a small market with about 9 million inhabitants. To make sure we keep a very strong financial sector in Swedish we think it is essential to have the strong universal banks. To separate the “deposit bank” from the “trading bank” will create a situation where our Swedish banks will have difficulties in finding the new needed capital and to create banks strong enough to be competitive with the international banks.
  • The universal bank is an efficient way of doing banking and keeps the cost for the service on a reasonable level. In our opinion a split up of the Swedish banks would substantially increase the cost but will have a very limited effect on the risk for our depositories.

The ongoing global and European regulatory reform that to a large extent aims at promoting a more sound risk management must be allowed to gain effect, before we can see if another step is needed.

Stockholm 2012-11-13

Swedish Securities Dealers Association

Erik Öhman

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