A Subprime Parallel to Green Bank Loans Is Drawn in Finland
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Finland is worried that European plans to potentially make it cheaper for banks to lend to green projects could underestimate default risks, much in the same way that subprime lending in the U.S. did over a decade ago.
Marja Nykanen, who chairs the Financial Supervisory Authority in Helsinki, says her concern is that supporting ethical lending through more lenient risk weights on bank loans might threaten financial stability.