Lender liability in Swedish law
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Lender liability in Swedish law Lars Gorton Law Faculty, University of Lund, Box 207, Lund 22100, Sweden tel: +46 222 1127; fax: +46 831 1768; e-mail: [email protected]
Lars Gorton is Professor of Banking Law, University of Lund and Professor Adjunct of International Business Law, Stockholm School of Economics.
ABSTRACT In Sweden as elsewhere, financial law is an area of legislation which has expanded considerably in the last two decades. Previously Swedish banks were strictly regulated through banking legislation and had little opportunity to act commercially. More recently, however, following the so-called deregulation of financial institutions — which has actually meant an extensive reregulation at the European Union level and indeed worldwide — there have been substantial efforts to allow a freer movement of capital. This development has had a significant impact on the private law affecting banks as a result of the emergence of new types of financial transactions. This paper seeks to describe and illustrate, from a Swedish perspective, at least part of this development and in particular examines Swedish banks’ function as lenders and their liability as such.
Journal of International Banking Regulation, Vol. 4, No. 1, 2002, pp. 32–54 # Henry Stewart Publications, 1465–4830
Page 32
INTRODUCTION Banks have traditionally had relatively specific functions in the financial sector. One classical bank function has been to receive deposits from and to lend money to the general public and to assist in payments.1 It used to be quite common that banks performed their services in particular domains, such as merchant banks, investment banks,
savings banks, but in many countries banks covered broader areas of activity.2 Banks seem nowadays to perform several functions besides more traditional banking services, and there have been several mergers and restructurings in the financial sector. With this development also follow various new duties and responsibilities. To an ever growing extent banks and other financial institutions have broadened their scope of services, and within the same financial group one may find a variety of services.3 At the same time new financial products and services are being produced and distributed by different entities, and new competitive patterns have developed and continue to evolve. This is also recognised in some of the administrative (and other) legislation. Relations between the banks and other financial institutions as well as their respective roles vis-a`-vis their customers have changed. We have seen in several ‘financial groups’ a swing from ‘on balance sheet’ operations (borrowing and lending) to a growing degree of ‘off balance sheet’ operations (marketing and sale of equity funds etc). The field of financial law is characterised by a large number of specific administrative rules as well as by several broader general private law rules and principles and also more narrow specific rules. Banking law could, as we shall see, be regarded as a conglomerate of law.4 Comparatively many more specific adminis
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