Well, I did my homework and found out that the 1 inch mastercylinder is grossly mismatched with the Volvo calipers. A volvo mastercylinder has a bore of 9/16 for the front and 5/8 for the rear!
Luckily enough a Volvo mastercylinder fits the powerbooster with some minor adjustment.
Now the brakes seems to be ok, but the pedal ratio of 3.5:1 might be a bit low.
But the brake pads and rotors are brand new and I have not tried it out on the
highway yet. But at least I am on the right track.