The Left Party is now announcing that it wants to introduce a temporary “oligopoly tax” of 50 percent of profits that exceed the average profit of the last five years.
In the first half of 2023, the four major Swedish banks – Handelsbanken, Nordea, SEB and Swedbank – made a combined profit of SEK 79 billion. The background to these excess profits is, among other things, a strong net interest income.
The Left Party now wants to introduce a temporary “oligopoly tax” on the banks’ excess profits, said party leader Nooshi Dadgostar during his summer speech in Gothenburg. The term “excess profits” refers to profits above the average of the last five years.
– Enough is enough, Left Party leader Nooshi Dadgostar told SvD Näringsliv.
It is also proposed that all the revenue from the profit tax should be used to support social welfare, for example by employing more people in schools and health care.
– For the Left Party, the choice between protecting the unreasonable excess profits of the banks and protecting welfare is obvious.
The Left Party proposes a tax of 50 percent of the banks’ excess profits, to be introduced in the period 2024-2026, but which can be extended depending on the situation.
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After almost ten years as a customer of SEB, one of Sweden’s largest banks, the bank suddenly closed Linda’s three business accounts. Despite several emails and attempts at telephone contact, Linda has received no explanation from the bank as to why they have decided to close her accounts.
It was in 2014 that Linda bought Titans Sportbar in Norrköping together with her former husband. The purchase was made through their joint holding company, which was set up just before the purchase.
The business account for the sports bar was with the bank, SEB, and Linda therefore needed to go there and arrange contracts and various other things required for a business purchase.
SEB said that Linda needed to create a private account with them for everything to go through. She had both a house loan and the holding company in another major bank, but she still created a private account with SEB.
Customer knowledge
In 2015, they bought the Stopet nightclub. This time, Linda and her ex-husband needed to create a new business account for the nightclub, so she asked SEB if it was possible to open another business account with them. It went well and since then the businesses have been running smoothly. Linda has submitted all the KYC questions on time and has never had any loans or credits with SEB. Nor has she received or sent money abroad, something that Swedish banks have become increasingly reluctant to allow.
Last year, Linda and her current husband found a new premises in Norrköping that they liked and decided to start a third business, Lindas kula. Again, Linda applied for a business account with SEB and was approved in May 2024. At the same time, she decided to transfer the holding company to SEB, so that most of it would be gathered at the same bank, and last summer they opened the doors to Lindas Kula.
Everything went well for Linda and the three restaurants in Norrköping. In the fall, she received new questions about customer knowledge, where she as an entrepreneur must also send in account transactions, annual reports and questions about cash withdrawals. Everything was sent in as usual, the only thing that couldn’t be sent in was an annual report for Linda’s Kula, which had only been open for a few months.
In September this year, Linda received a message from SEB stating that they did not “understand” the answers received and that they would therefore close all commitments, i.e. all company accounts and also the holding company. She was asked to transfer the funds immediately to an account outside SEB. No further explanation was given at all. Linda was confused by the message and responded immediately.
“I have emailed in documentation on what you asked for?Or is there something you are missing?” she wrote in reply to the message.
No further explanation was given at all
No reply was received from the bank. Linda tried calling and emailing again, but no one answered.
Right to know why
Linda got in touch with the local branch manager of SEB in Norrköping, who did reply to her. The branch manager wrote that Linda of course had the right to know why her business accounts would suddenly be terminated after almost ten years as a customer, and the manager would contact the responsible department. However, despite numerous calls, the branch manager was unable to reach anyone in charge. As local bank branches do not own these issues, she was told that it was difficult for the branch manager to do more.
Linda also managed to get in touch by email with an employee at the local SEB office, who worked specifically with corporate issues, but she was not as helpful as the branch manager and only referred to the central support. When Linda called the phone number she was given, she was transferred to the wrong department.
The bank will send out letters
The manager also told Linda that when accounts are closed, SEB should send out three letters by post before the accounts are closed, but Linda has not received a single letter home. The bank is also supposed to contact the customer if they do not receive the right answer, which has not happened either.
Despite repeated attempts, Linda has not yet received a reply and her accounts were closed without any feedback from the bank. As a result of the closure of her business accounts, Linda was no longer able to accept card payments at her restaurants and could only accept cash.
– I have lost a lot of money in these weeks, for no reason whatsoever, Linda tells The Nordic Times. Photo: Private
Although it is usually extremely difficult for entrepreneurs to find a new bank after going through what Linda has been through, against all odds she has managed to find a new bank and saved her business, but she is still waiting for an explanation from SEB. A complaint has been made to the Swedish Financial Supervisory Authority and the Swedish Consumer Agency.
– It’s so sick that you can be treated this badly as an entrepreneur in Sweden, Linda concludes.
The crisis of confidence in banks
Linda’s experience is far from unique and has become symptomatic of how Swedish banks treat their customers, with vague references to “lack of customer knowledge” and by hiding behind their “customer knowledge department” without anyone being held accountable in practice. In its article series The crisis of confidence in banks, The Nordic Times documents how banks have devastated businesses and left individuals in desperate financial situations.
US banking giant Morgan Stanley is now under investigation by several federal regulators.
This time, its wealth management division is under scrutiny. Authorities say the bank neither knows nor seems to care where its wealthy clients’ money comes from.
In February, the investment bank was implicated in a money-laundering scandal in Venezuela and was investigated by the U.S. Department of Justice and the U.S. Securities and Exchange Commission, which oversees securities trading.
Now, the SEC and several other U.S. agencies have begun investigating Morgan Stanley’s wealth management division, and the Federal Reserve has also become involved, the Wall Street Journal reports.
They say the bank does not know enough about where its wealthy clients’ money comes from – and does not appear to be doing much to control it.
The authorities point out that the investment bank has not mapped the financial activities and histories of its clients, including international clients who are considered to be involved in various forms of suspicious or illegal activities.
Relies on revenues
At the same time, it is emphasized that the bank is dependent on the high revenues of its wealth management department and has been since the financial crisis of 2008 – this is also believed to be the reason why it did not bother to sufficiently check where the money actually comes from.
“The division generates stable revenue streams that Morgan Stanley relies on to smooth out downturns in investment, banking and trading”, Swedish business magazine Dagens PS points out.
Morgan Stanley has previously stated that it intends to cooperate fully with the US authorities in all cases related to money laundering.
38 municipalities in Sweden have no bank branches at all. Johan Grip, chief economist at Företagarna, says this is a “worrying development” that particularly affects small businesses.
Over the past 15 years, banks have closed 1,069 branches in Sweden, leaving 918, mainly in rural areas, and 38 of the country’s 290 municipalities have no bank branches at all, according to a survey by Bonnier-owned business newspaper Dagens Industri. This represents 13 percent of all municipalities and is growing, affecting many small businesses in rural areas.
– This is a very worrying development that is continuing. Wherever I travel in Sweden, small business owners testify to a sense of despondency, where closed offices and reduced interest from banks affect their business, Johan Grip, who is responsible for analyzing socio-economic issues important to businesses and entrepreneurship at the business organization Företagarna, told the newspaper.
“Maximizing profits”
Grip says there are several consequences for small businesses when the nearest bank branch is far away, including making it more difficult to get a bank loan.
– All lending is based on relationships and an understanding of local conditions, Grip says. That has been lost in many places.
Banks say this is due to increased digitalization and the fact that it allows them to provide the same service without being physically present. But Grip points out that it is more about increasing profits for the banks, and calls their actions “crass”.
– It would be more flattering if the banks could say that their actions are about maximizing profits. Instead, they want to see themselves as social institutions, which is a bit ridiculous, he says.
Seven years ago, Nordea’s Danish branch was reported to the police for violating money-laundering regulations. The investigation is still ongoing, and documents show that the major bank has not only had suspicious partners in totalitarian dictatorships, but has also been linked to terrorist financing and financial crime.
Danish business journal Berlingske Business has obtained confidential material from the Danish Financial Supervisory Authority (FSA) that reveals “mysterious Russian customers with multi-million dollar payments from shady companies in remote tax havens, partners in undemocratic states with terrorist organizations or widespread corruption, and hundreds of warnings about money laundering and terrorist financing”.
According to the Financial Services Authority (FSA), Nordea’s failings were so serious and pervasive that it was “obvious” that the bank “could have been used for money laundering or terrorist financing”.
Among other things, Nordea is said to have largely failed to screen the bank’s “highest-risk customers” who may have had links to terrorism and financial crime – and in several cases, private customers were able to register as corporate customers.
“Strengthening our defense”
– Since 2015, Nordea has spent DKK 11 billion on strengthening our defense against financial crime, and today we have more than 3,100 employees focused on this area, Nordea Denmark’s general counsel Anders Holkmann Olsen told Berlingske, but declined to comment on the ongoing investigation.
It is not clear who Nordea’s former partners with possible terrorist links are. Several experts predict that the major bank will have to pay fines in the billions of dollars.
It should be noted that Nordea and other major banks have been heavily criticized in recent years for arbitrarily banning and suspending customers on the basis of “lack of customer knowledge” – customers who are deemed unprofitable or “troublesome” for various reasons. While insignificant individuals or small businesses lose their accounts, critics argue that criminal and suspicious actors that banks consider lucrative customers are allowed to continue their banking relationships.
