Byline: TOM SCOTNEY Legal & Finance Editor
One of Europe's top economists says bankers in the UK should take a leaf out of the Swedish book to succeed during the recession.
Jan Haggstromis chief economist at Swedish bank Handelsbanken, which has had strong profits despite the financial crisis, and has opened branches in Birmingham, Stoke, Wolverhampton, Coventry and Shrewsbury.
Mr Haggstrom said the "traditional" approach of Handelsbanken and support it had from the Swedish government meant it had performed better than banks in the UK and the United States that had been crippled by bad debts.
He said: "It's very much about the corporate culture of the bank. We have very controlled decision-making, and we keep all the loans on our books so if we didn't do a good deal it comes back to haunt us. That's very different to the US way, where debts are immediately packaged up and sold off. So I think it's back to the more traditional banking model - by putting a lot of decision-making in local hands we made sure loans were of a better quality. Banking should be a local business."
The lack of a regular bonus culture at the bank meant people were less likely to take risky chances. Handelsbanken has no personal bonuses, just a yearly scheme where every employee receives a bonus in their retirement package if the company as a whole outperforms its competitors in a year.
"It's very different from these quarterly and annual bonuses, and it's not linked to any particular part of the bank," Mr Haggstrom said. "It's a better way to organise your incentive system - it's more long-term. …