Loan terms to private equity firms too relaxed, says Nordea chief

When the next financial recession comes around, banks offering excessively loose terms on loans to private equity firms in order to win the financing of major corporate deals will struggle. The warning comes from Frank Vang-Jensen, head of Nordea, to the news service, Insidebusiness.

Frank Vagn-Jensen, head of Nordea | Photo: PR

Come the next downturn in the financial sector, problems are likely to arise for banks whose loan terms for financing private equities' corporate deals have been too relaxed, the new personal banking chief at Nordea, Frank Vang-Jensen, tells news service Insidebusiness.

"We've seen a tendency that the loan terms on certain deals became too relaxed, and the deal prices were already high. This can cause problems when the economy recedes. We'll see financial stress, so it's extremely important for the banks to be able to influence the capital structures and to make sure we get our money back," says Vang-Jensen.

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