• Sweden issues ‘biggest clampdown on banks’

Bloomberg said that 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.

An analyst at the organisation said steps taken to date by lenders including Danske Bank and Nykredit, as well as Nordea Bank and Svenska Handelsbanken in Sweden, aren’t enough.

“The more widgets and gadgets you bring to the table, the more complex the product will be and the more risks there will be,” Per Tornqvist, a Stockholm-based analyst at S&P;, told Bloomberg. “The government creates the level playing field for market participants.”

The business news agency recently said that investors will need to reverse bets that Sweden’s banks — among Europe’s best-capitalized — will have enough spare cash to dish out bigger dividends or buy back shares.

Financial Markets Minister Peter Norman and Swedish Finance Minister Anders Borg warned banks last year not to raise dividend payments and instead focus on increasing capital buffers further.