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NORDIC ZONE MOVES TO UPGRADE PAYMENTS INFRASTRUCTURE
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Regional Review
SWEDISH PSD LEGISLATION
is expected to be ready during the
spring of 2010, though
Skandinaviska Enskilda Banken AB
(SEB) says its adherence to the directive
will be ready from November 1. David
Teare, global head of customer
relationship management at the bank,
says:“For clients, the PSD will entail two
major changes in terms of payments.
Transferred amounts shall reach the
receiver intact; no deductions may be
made from the payment amounts, as
previously occurred. Instead, any fees
must be reported separately. In addition,
the amount will be available to the
recipient the same day as the receiving
bank is credited.”
PSD is an important building block
in creating a single European payment
market and aims to equalise legal
conditions governing payment services
SWEDEN’S CENTRAL BANK in
June noted that loan losses this
year and next among the country’s
leading banks could reach as much as
$23bn, as the economies of Latvia,
Lithuania and Estonia continue to
contract at double-digit rates this year.
The situation is not helped by the fact
that the Baltic countries are hanging on
to their currency pegs, thereby making
EUROPEAN PAYMENTS SYSTEMS
UPGRADED IN NORDIC ZONE
The Payment Services Directive (PSD) aims to make payments
within the European market easier and more cost efficient. All
European banks in the European Union group and within the
wider European Economic Area (EEA) countries must comply by
the beginning of November this year.
throughout Europe for both individuals
and enterprises. PSD also creates the
necessary legal platform for the Single
Euro Payments Area (SEPA). Together,
the PSD and SEPA will reduce national
divergences and harmonise payment
instruments, technical standards and
information on payments.
JP Morgan’s Treasury Services
business, full-service providers of cash
management, trade finance and
treasury solutions, recently announced
its new payables and receivables
capabilities in the Baltic and Nordic
regions through both urgent payments
and non-urgent local automated
clearing house (ACH) channels.
Corporates with customers or suppliers
in these markets can now initiate and
receive payments in seven additional
countries. The move brings the total
number of European countries in
recovery a lot more difficult. Although
the temptation and encouragement for
the Baltic states to devalue is rising, it
would have the double whammy of
stymieing their desire to be part of the
EU currency union, and also spiral more
borrowers into default. Either scenario
does not bode well for the Nordic banks.
Nordea Bank AB and Svenska
Handelsbanken AB, two of the region’s
which JP Morgan clients can transact in
the domestic clearing to 20, in addition
to SEPA and multi-currency
transaction services. Alex Caviezel,
head of Treasury Services in Europe,
Middle East and Africa, explains: “The
model is ideal for larger organisations
based outside the Baltics or Nordics
which actively trade there.The solution
simplifies the task of managing
multiple bank accounts and bank
relationships, enabling clients to
manage their funds conveniently on a
London-based account.”
Additionally, Caviezel says that the
bank continues to invest in its global
payments platform, “enhancing local
payments and receivables services in
Italy, Switzerland and the UK”. He
adds: “These enhancements include
improved reporting, later cut-off times
and enhanced local ACH connectivity.”
TESTING TIMES FOR NORDIC BANKS
Nordic banks have substantial exposure in the Baltic region after
lending heavily in Latvia, Lithuania and Estonia during several years
of booming growth. As the Baltics continue to exert a drag effect in
the Nordic markets, foreign banks are looking at the potential to
expand their business lines.
larger banks, have reported forecastbeating
second-quarter earnings after
taking much smaller provisions than
rivals for potential losses on bad loans.
However, Nordea and Svenska
Handelsbanken may be the exceptions
that prove the rule, as Swedbank AB
and Skandinaviska Enskilda Banken
AB, which have expanded aggressively
into the Baltic countries, will impact on
S E P T E M B E R 2 0 0 9 • F T S E G L O B A L M A R K E T S