Foreign banks in Estonia: blessing or curse?
Indrek Neivelt, chairman and co-founder of the Estonian bank Pocopay, has launched a campaign aimed at putting foreign banks operating in Estonia - in particular Scandinavian ones - under pressure. He accuses them of generating twice as many profits in Estonia than abroad while their pension funds are far less profitable for Estonian customers than they are in Sweden. This has triggered a debate about the banking system in Estonia.
An important stability factor
Estonia needs the big foreign banks, Jaak Tõrs, head of the Financial Stability Department at the Bank of Estonia, explains in Äripäev:
“Whereas in Estonia the credit portfolio started to grow again immediately after the 2008 crisis, in Latvia it took ten years for that to happen. This means that the banks in Estonia were better able to sustain economic growth, because it's the banks' job to finance people and businesses. The quick recovery was possible because the Swedish owners maintained the banks' liquidity. For the central bank it's important for the banking system to function in both good and bad times. A wide circle of owners of the banks promotes stability.”
Lazy consumers have themselves to blame
For Eesti Päevaleht several factors are responsible for the situation in the banking sector:
“There are several ways to approach this problem. Neivelt himself criticises above all the state: parliament, the Bank of Estonia, the Ministry of Finance, the Consumer Protection Board, etc. But many of the problems faced by the banks and pension funds are also the fault of customers themselves and their own laziness. You can lead a horse to water, but you can't make it drink.”