The Impact of Recent Regulatory Reforms on Cross-Border Banking: A Study of the Nordic Markets

This chapter investigates the relationships between banks in different countries through an empirical study based on interviews with the six leading Nordic banks and the Swedish export credit agency. The authors find that although all six banks have significantly reduced the number of correspondent banking relationships, they approach the reduction in different ways. This means that their regulatory responses are similar at an aggregate level but quite different on the individual basis. The results further indicate that compliance costs have risen extensively with potential implications on trade. The topic is interesting in light of the new Basel III regulatory agenda and with regard to money laundering and terrorist financing norms.