Why the Nordics need a stronger capital market
The desk argues that the proposed integration of Nordic capital markets, as highlighted in Nordea's recent commentary, is crucial for supporting local businesses and retaining investment within the region. Per the full note , the Nordic Compass initiative aims to boost competitiveness and resilience in the region, particularly by enhancing access to long-term capital for growing firms. This development comes amid concerns over Europe’s competitiveness as it grapples with rising challenges from global players like China and the United States. As institutional investors increasingly seek stable markets for investment, a stronger capital market in the Nordics could serve as an attractive proposition for both domestic and international capital flows.
What the desk is arguing
The desk maintains that the strengthening of Nordic capital markets is essential to support local economic growth and innovation. The Nordic Compass initiative, backed by Nordea, strives to enhance investment channels and remove barriers impeding capital flow across the region, ensuring that companies at all stages can secure necessary funding.
The commentary emphasizes that achieving a more integrated Nordic capital market could lead to Nordic businesses achieving greater scalability, encouraging firms to remain regional as they grow. Petteri Änkilä from Nordea stresses the importance of retaining Nordic capital by proposing a Nordic growth fund to further enable this transition.
Where it sits in our coverage
Our consensus target for the relevant currency pair, reflecting these regional developments, stands at 1.075, with a range between 1.04 and 1.12. The targets set by several firms include: - jpmorgan: 1.10 (Mar-26) - bofa: 1.04 (Mar-26)
This desk's view aligns closely with jpmorgan, sitting at the upper bound of the expected range. However, it diverges from bofa, which appears to have a more conservative outlook.
How other firms see it
Firms like jpmorgan and nordea appear aligned with the initiative's objectives and the anticipated benefits of capital market integration. Conversely, bofa expresses caution regarding the immediate impact of these changes on competitiveness and investment inflows.
Expect developments around the Euro area’s currency fluctuations to reflect, at least in part, the Northern capital market dynamics. Indicators such as EUR/USD movements could serve as barometers for the broader European market integration and capital flows triggered by these Nordic initiatives.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Nordea's Nordic Compass initiative seeks to enhance capital market integration.
- 02A Nordic growth fund could retain more capital within the region.
- 03Nordic firms face competitive pressures from global markets.
- 04Institutional investors benefit from improved access to local investments.
Market implications
Investors should monitor the trend towards a more cohesive Nordic capital market, as upcoming proposals may influence regional currency stability. Pay close attention to EUR/USD movements as indicators of how the broader European market reacts to these developments.
Risks to this view
Failure to implement proposed capital market reforms, or significant geopolitical disturbances, could undermine the Nordics’ ability to attract investment, potentially leading to a reassessment of the announced targets. Heightened competition from non-European markets may also pressure capital inflows.
Business growth Why the Nordics need a stronger capital market 11-09-2026 The Nordic Compass alliance will convene this autumn to present proposals for strengthening competitiveness and resilience in the Nordics. Nordea is a founding partner in Nordic Compass and leading one of four strategic tracks focusing on retaining Nordic capital in the region to support growth. Founded in spring 2026, Nordic Compass is an industry-led initiative dedicated to advancing competitiveness, harmonisation and resilience across the Nordic region.
Nordea, a founding member, leads the capital markets track, which aims to remove barriers to investment, encourage cross-border capital flows and enable Nordic companies to access long-term capital anchored in the region. Petteri Änkilä, Head of Large Corporate & Institutions at Nordea. While recent media attention has focused on the idea of a unified Nordic stock exchange, the case for a stronger capital market runs deeper.
Petteri Änkilä, Head of Large Corporate & Institutions at Nordea, explains what capital markets integration means for Nordea and its customers: “As a Nordic bank, we want to enable Nordic-scale solutions that benefit our customers. A more integrated Nordic capital market would mean that companies at all stages of the growth cycle have access to capital and that private and institutional investors have the ability to invest seamlessly into Nordic companies.” “The Nordics consistently produce globally competitive firms. The challenge is ensuring that more of them remain Nordic as they scale, which is why we see a need for a Nordic growth and scale-up fund. ” Europe's competitiveness challenge Nordic Compass has highlighted Europe's declining competitiveness relative to China and the United States.
Jyrki Katainen, Chair of the Nordic Compass Board and Nordea’s Head of Group Public & Regulatory Affairs, frames both the challenge and the opportunity for the Nordic region: Jyrki Katainen, Chair of the Nordic Compass Board and Nordea’s Head of Group Public & Regulatory Affairs. “Together, the Nordic countries represent one of the most innovative and prosperous economic regions in the world. We have world-class pension systems, globally competitive industries, sophisticated financial institutions and some of Europe's strongest technology ecosystems. But despite deep economic integration in trade and labour mobility, Nordic capital markets remain largely national.” In practice, this means investment mandates, tax structures, retail savings frameworks and capital market infrastructure are still organised primarily around individual nations.
Nordic firms operate in a combined market of nearly 30 million people, yet many still seek financing in larger, more integrated markets elsewhere. Capital is plentiful, but its allocation remains fragmented. “Europe needs larger pools of growth capital, deeper capital markets and greater cross-border investment if it is to compete with the United States and Asia. Rather than waiting for the EU, the Nordic countries can move ahead and demonstrate what regional integration looks like in practice,” says Petteri Änkilä.
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