Cruse Associates, Scandinavian Banks, G-20 Meeting, Everbright: Compliance

Scandinavia’s biggest banks have failed to curb funding risks linked to financial innovation and will probably only avoid downgrades if national regulators force through stricter measures, according to Standard & Poor’s. Steps taken to date by lenders including Denmark’s Danske Bank A/S (DANSKE) and Nykredit A/S, as well as Nordea Bank AB (NDA) and Svenska Handelsbanken AB (SHBA) in Sweden, aren’t enough, said Per Tornqvist, a Stockholm-based analyst at S&P. As competitive pressure “forces banks to maintain short-term funding,” regulators need to step in and help banks extend their funding maturities, he said. AAA-rated Scandinavia’s biggest banks are more vulnerable to funding shocks than their peers in the U.S., France and Italy, according to a July analysis by S&P, which measured liquidity risks five years after the collapse of Lehman Brothers Holdings Inc. paralyzed the global financial system.