According to Erkki Raasuke, head of the new joint bank of Nordea and DNB, overregulation has led to a situation in which Estonian financial institutions have become extended arms of the police.
"Surveillance [over the financial sector] is being carried out in the prescribed framework, but the pendulum has reached such a point in the complexity, contradictoriness and absurdity of regulations from which I hope it will soon revert back," Raasuke said at the jubilee conference of the Financial Supervision Authority on Tuesday. "Financial institutions have been made into an extension of the police. This may be optimal from the societal perspective, but it should have been preceded by discussion.
"Another big set of problems which will increase transaction expenses is regulation which dictates the inner working procedures of businesses in the financial sector — who needs to report to whom," he said, adding that these things depend upon group dynamics and cultural backgrounds and that there may be many ways to reach a good result."
"We stand here in April 2017 while a number of banks in the Baltics do not provide the service of making payment in dollars," Raasuke highlighted. "This is pure regulatuory drive that has led us here. Would we have imagined that in a fully globalized world, it would be impossible to make payments in one of the biggest currencies in the world? This is the point where regulators should gather around their tables again. This creates fragmentation, congestion and a number of other problems.
Andres Kurgpõld, a member of the management board of the Financial Supervision Authority, said in response to Raasuke that it is often customary to overregulate following a financial crisis.
Editor: Aili Vahtla