---
title: "Even the Bankers Are Poor in Finland — Sami Miettinen on 23 minuuttia #489"
titleOriginal: "Neuvottelija Miettinen: Suomessa pankkiiritkin ovat köyhiä | Jakso 489 | Heikelä&Koskelo 23minuuttia"
description: "Jussi Heikelä and Arto Koskelo put the Credit Suisse wealth report on screen and ask whether Finland is rich or poor. Miettinen's answer runs through the €600bn of Finnish net wealth of which €400bn sits in homes, why only 1.9 per cent of adults are dollar millionaires against Sweden's 7, what Iceland did differently after its banking crisis, and — the part he was really brought on for — what makes a good negotiator and why Finland does not prepare."
format: "podcast"
show: "Heikelä & Koskelo 23 minuuttia"
episode: "489"
hosts: ["Jussi Heikelä","Arto Koskelo"]
date: 2022-08-22
duration: "46:32"
language: "fi"
original: https://www.youtube.com/watch?v=gxJ7F1Pe-14
canonical: https://www.neuvottelija.com/media/23-minuuttia-489-even-bankers-are-poor-in-finland/
---

# Even the Bankers Are Poor in Finland — Sami Miettinen on 23 minuuttia #489

The framing question is put bluntly: the prime minister said Finland pays into the EU recovery
package because it is among the wealthy countries. Is Finland rich or poor?

## The wealth numbers

Miettinen's answer distinguishes the state from the citizens. The **state** is rich — it takes
eight billion euros of new debt a year on every citizen's behalf. The **Finns** are in the poorest
bracket of Western Europe, with Eastern Europe and Portugal as the peer group, while the other
Nordics, Germany, France and Italy carry at least fifty per cent more wealth per adult.

The figures he works from, taken from the Credit Suisse wealth report he knows from the inside:

- Finnish net wealth is roughly **€600 billion**, of which **€400 billion is in homes** and
  €100 billion in deposits. Listed equities held by private individuals are around €40 billion —
  about the same as the additional debt taken on during a single government term.
- If that €600 billion returned two per cent it would produce €12 billion a year, which is not
  far off the annual new borrowing. Private wealth does not cover even the *increase* in debt,
  let alone repay it.
- **1.9 per cent** of Finnish adults are dollar millionaires — 85,000 people, counted with the
  home included. In Sweden it is over seven per cent (570,000 people), in the United States
  almost nine, and in Switzerland roughly one in seven. Finland has under a third of Sweden's
  proportion.
- Italy, a recipient of Finnish support, has three per cent.
- The richest one per cent of Finnish adults — some 40,000 people — hold about €1.6 million each.
  In Sweden the equivalent group holds €6.6 million.

His point about that last figure is the one he cares about. In Sweden, if you start a company
inside such a network, somebody can put ten million kronor into a moderately promising nephew's
business. In Finland the top percentile's wealth is the flat in a good district and the summer
place — there is nothing left over for unlisted investment, because that money has been
institutionalised. So Finland relies on foreigners, the state, or the pension funds, and the
result is what he calls a **subsidiary economy**: the Helsinki exchange's market capitalisation
is large, Finns own little of it, and somebody else collects the dividends. The €1.1 billion of
listed dividends flowing to Finnish private individuals is what a government would have to work
with if it wanted to live off capital income.

Finland has, he says, the world's sixth-highest overall tax rate and third-highest capital income
rate, plus higher indebtedness than the other Nordics; roughly 97 per cent of the world's
population lives in countries that tax less. His prescriptions are unspectacular: cut marginal
rates towards flatter structures, stop building levies that exist nowhere else, and — on
inheritance tax specifically — note that it yields only €800 million a year, which is about ten
per cent of one year's new borrowing.

**Denmark is the anomaly** both men keep returning to: the world's highest tax rate and the
world's highest capital income rate, and yet near the top of the wealth tables. Miettinen has no
tidy theory for it beyond the absence of the euro, and says so.

**Iceland is the other one.** Fifteen years after apparent bankruptcy it sits at €336,000 per
adult, more than double Finland. What it did was let the banks fail, decline to socialise their
debts onto the state, impose capital controls and release them years later. A harsh cure, and one
that left a great deal of private wealth in Icelandic hands. Asked what Finland would do if the
IMF arrived with instructions, Miettinen's forecast is that Finland would follow every one of them
and then ask whether it had been good enough — as it did in the 1990s banking crisis, when the
assets went cheaply to a foreign collection company.

## Where he stands

Asked to place himself politically, Miettinen separates **economic liberalism** from value
conservatism and says his position is the former: not that the welfare state is wrong, but that
transfers should follow the life cycle and genuine circumstance. His example of the confusion is
Otaniemi appearing among Finland's poorest districts because it is full of engineering students
who will not be poor for long — Finland finds small accumulation over a lifetime hard to think
about, which is why its only wealthy people are 50-to-70-year-olds who own a home in a growth
centre.

On the Libera-published *talouspoliittinen manifesti* he co-authored seven years earlier with
Tuomas Malinen, Peter Nyberg and Vesa Kanniainen, he still stands by the medicine, and refines
one item: student funding on the Australian and British model, where you borrow against the
degree and repay only above a median income — which the Australians consider fair precisely
because it does not punish those whose degree does not pay.

## The London years

The hosts want the glamour and get some. The 1998–2000s were business class and occasionally
first, and closing dinners were an event: on a $1,050 million Instrumentarium deal in New York
he was sent to buy the closing gifts and gave a famously difficult M&A director a pair of oversized
boxing gloves. His favourite line of the era came from the buyer's chief executive thanking the
assembled bankers from Lazard, Credit Suisse and Rothschild: *you have all the qualities of a dog
except loyalty* — and every banker in the room laughed, which proved the point.

His structural observation is more useful than the anecdotes. Finland has **two and a half banks**
— Nordea, OP, half a Handelsbanken and a Danske branch — and no banking industry to speak of. In
London or Stockholm banking is a large share of GDP, and when you hold the keys to a balance sheet
some of it spills onto local employees. That is part of why Finland has no wealth. But he is clear
that a broking banker's role is a well-paid job rather than a route to riches: you get rich by
owning, which means founding a fund or a firm.

## Negotiation

Asked who he would put in charge of a Finnish delegation, Miettinen names the people he
interviewed for his book — Björn Wahlroos, Martti Ahtisaari, Risto Siilasmaa — and notes the
difficulty of finding a current one. Finland's problem, though, is not the absence of a star but
the absence of **preparation**: very little scenario analysis is done, and he cites both the
Fortum–Uniper negotiation and Finland's share of the EU recovery package as outcomes that could
have been improved without heroics.

The Wahlroos material is the practical core. **Whose side is the clock on?** — a good macro setup,
because if you are not in a hurry you let time run and the pressure to make bad offers lands on
the other side. **Say what you mean and mean what you say**, because lying has little use.
**Don't talk soft**: if you fill the room with noise the hinge points lose their weight. And **if
you make a threat, be prepared to carry it out** — announcing that you will write a tweet about it
does not help.

On teams he is blunt that going in without assigned roles is an amateur error. Three people
should be an **alpha** who leads, a **beta** who stays quiet and can walk the thing to the brink,
and a **gamma** who takes notes and tells the others when to break. What actually happens is that
the most senior person talks about whatever comes to mind, the juniors stay silent, the clock runs
into the small hours and somebody starts wanting to go to bed. Nor is any of this taught — he
notes that his co-author Juhana Torkki writes about public speaking for the same reason: Finns
learn both negotiation and communication from their first boss and nowhere else.

On hostage negotiation as a business metaphor, he is consistent with his other appearances: it is
over-romanticised, because the counterparties are usually desperate people rather than functioning
sociopaths. What does transfer is **tactical empathy** — which, he points out, does not require
the empathy to be genuine, in the same way that the good cop in good cop / bad cop need not be
good.

## The YEL argument

The closing subject is the then-pending reform of the self-employed pension scheme. Miettinen's
objection is structural: **YEL is not funded at all** — it runs hand to mouth, where the employee
scheme has around a quarter of its liabilities covered — so a €400 million annual state top-up for
retired entrepreneurs is being solved by taking the money from current entrepreneurs. And the
people it is taken from are not wealthy: a great many YEL pensioners receive around a thousand
euros a month, and the €3.8 billion of dividends from all unlisted companies — everything from
tech firms to hairdressers — is four per cent of the €130 billion earned-income pool.

His alternative is the British construction he keeps recommending: fund your own pension
pre-tax, invest it yourself, and pay tax on the way out. With a hundred thousand one-person
companies in Finland, his warning is that pushing them over adds to the eight-billion deficit
rather than reducing it.

Asked where he will retire, he declines Portugal: five daughters, no appetite for a second base,
and he intends to die here. He does have a few thousand a month accumulating in Britain, which he
expects to receive — because it is under English law, and there, he says, property rights still
work.

Original recording (Heikelä & Koskelo 23 minuuttia): https://www.youtube.com/watch?v=gxJ7F1Pe-14

---

Cite as: Sami Miettinen, guest on Heikelä & Koskelo 23 minuuttia 489 — Even the Bankers Are Poor in Finland — Sami Miettinen on 23 minuuttia #489, 2022-08-22, https://www.youtube.com/watch?v=gxJ7F1Pe-14. Record: https://www.neuvottelija.com/media/23-minuuttia-489-even-bankers-are-poor-in-finland/.