Social Democrats propose a temporary bank tax of four billion kronor ahead of the autumn election. Major banks warn they will raise mortgage rates if the tax is introduced. Finance Minister Elisabeth Svantesson cautions that costs will be passed on to customers.
The Social Democrats propose a temporary bank tax expected to generate around four billion kronor for the state coffers. The tax targets banks' interest margins when profits exceed a historical measure. The party describes the banks' profits as 'excess profits' and argues the funds should be returned to 'ordinary people and welfare', according to the party's spring budget motion.
Swedish major banks including Nordea, Swedbank, SEB and Handelsbanken reported a combined operating profit of 177 billion kronor last year. If the tax is introduced, the banks warn of higher mortgage rates. 'Another bank tax risks leading to higher borrowing costs for households, businesses and municipalities', says Petter Brunnberg, press officer at SEB.
Robert Boije, chief economist at SBAB, assesses it is 'very likely' that lending rates will be affected. Nordea and SEB provide similar warnings and reject compensating through lower margins. 'Margins on mortgages today are very low', Brunnberg emphasizes.
Finance Minister Elisabeth Svantesson (M) criticized the proposal last week. 'A bank tax or mortgage tax will largely be passed on to customers', she said. To Expressen, she has previously stated: 'We already have a bank tax and customers have not benefited from it. A new bank tax risks increasing mortgage costs.'
