Swedish financial supervisory authority Finansinspektionen has revoked HQ Bank's license, saying the bank grossly breached the most central provisions of Swedish legislation.
Finansinspektionen’s decision entails that HQ Bank may no longer conduct banking and securities business. Furthermore, the bank’s licenses to conduct pensions savings business and be a registered fund manager are no longer valid.
Finansinspektionen will submit an application to the District Court for the liquidation of the company.
Finansinspektionen said that HQ Bank has demonstrated serious deficiencies in its trading operations. The bank has taken risks that were so large as to compromise its survival. The bank’s board of directors and managing director have not limited its risk-taking as stipulated by Swedish law.
HQ Bank has overvalued its trading portfolio for a long time. The bank’s financial position has also been reported inaccurately. A correct valuation would have shown that the bank was undercapitalized since December 2008. The bank is thereby in violation of both Swedish accounting and capital requirement regulations, said the regulator.