* Social Democrats want 4 billion crown tax rise for banks
* Opposition party leads polls before September election
* Bank association warns higher costs will mean less credit
(Adds quotes from the Moderates and the Swedish Banking
VISBY, Sweden, July 1 Sweden's opposition Social
Democrats, front-runners to lead the next government after an
election in September, said on Tuesday they wanted to raise
taxes on banks in order to pay for child care reforms.
Magdalena Andersson, the Social Democrats' economic
spokeswoman and likely next finance minister, said the party was
keen to raise bank taxes by 4 billion Swedish crowns ($598
"It is as much as the banks earned on the corporate tax cut
in 2013," she told a news conference, saying the move would
restore banks to the same rate of tax as in 2012.
On Sunday, Social Democrat party leader Stefan Lofven
proposed improving child care by limiting the number of children
per group, a reform he said would cost 1.1 billion Swedish
Anna Kinberg-Batra, who chairs the Parliamentary Financial
Policy Committee of the biggest government party, the Moderates,
said the proposal would threaten Swedish economic growth and
"The Social Democrats are proposing a single tax hike
without any job-creating reforms. This is putting Swedish growth
at risk," she said, adding that lower growth would mean less
money for schools and welfare.
Swedish banks have come under fire in local media for their
high lending margins. Politicians across the spectrum have been
increasingly critical of banks and told them to put more money
aside to cover for potential risks.
The leading banks - Nordea, Handelsbanken
, SEB and Swedbank - made it
through the financial crisis relatively unscathed and are today
some of Europe's most profitable lenders, thanks in part to
strong public finances and a healthy corporate sector.
The four made a combined net profit of more than 19 billion
Swedish crowns ($2.84 billion)in the first quarter this year.
Thomas Ostros, CEO of the Swedish Banking Association, said
higher costs for the banks would lead to less credit, something
which could hurt both households and companies.
"This is a tax on credit, not on (bank) profits, which will
dampen growth. That's sad, because we need credit to get the
wheels (of the economy) in motion," he said.
Sweden's centre-right government is trailing the Social
Democratic-led opposition badly in opinion polls. An opinion
poll on Saturday showed support for the government parties
falling to the lowest level since 1979.
($1 = 6.6953 Swedish Kronas)
(Reporting by Johan Sennero; Editing by Mark Trevelyan)