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Wednesday, June 10, 2009


sweden takes emergency loan

more eastern europe fallout, via the guardian and ed harrison.

Sweden has taken out an emergency loan of €3bn (£2.6bn) from the European Central Bank as the shockwaves from the economic crisis in the Baltics reverberate through the banking sector.

The ECB, which has been monitoring the troubled Latvian economy for weeks, said the Swedish central bank, the Riksbank, had chosen to trigger a credit line originally agreed in December 2007.

Several Swedish banks have major operations in Latvia, where plunging trade revenues and a shortage of foreign capital have led to widespread defaults, leaving the government in Riga under intense pressure to devalue its currency, the lat.

the credit of swedish banks rallied on the news.

Swedish banks rallied after the authorities said that the sector would be able to withstand large losses from the Baltic region. Swedbank and SEB, in particular, have widened in recent days due to their exposure to Latvia’s ailing economy. Latvia’s currency has been under extreme pressure and there are serious doubts over whether a devaluation can be avoided. Sweden’s Riksbank announced that it was taking a EUR3 billion loan from the ECB to ensure financial stability.

no news yet of similar arrangements for austria or any of the other afflicted national banking systems, some within and some without the euro.

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Perhaps the Riksbank can save a few pennies by refrainig from funding its pretend "Nobel" Prize. It could always offer to restart the fuding when there's some sign that Economics has become capable of useful accuracy in managing our affairs.

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it's a typical Swedish response: claiming that all is well while preparing for worse, btw that Swedish "stress test" looked American, the two thumbs up was very expected.

Oh the prize is purely for PR, who would have heard of Riksbanken otherwise?

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