Financial Prey for the Populists
As the global wave of cross-border banking recedes, foreign banks are becoming easy targets for populist expropriation, especially in Central and Eastern Europe. More fundamentally, an important agent of local financial development and channel for stable capital flows to emerging and developing economies is closing down.
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LONDON – The money-laundering scandals at Danske Bank and Swedbank have already toppled both institutions’ CEOs and caused their share prices to plummet. The scandals, which are mainly related to the Nordic banks’ operations in Estonia, are also likely to speed up the ongoing withdrawal of foreign banks from emerging Europe.