Salem Radio Network News Thursday, March 30, 2023


U.S. bank woes no threat to Swedish financial system, watchdog says

OSLO (Reuters) -The collapse of Silicon Valley Bank (SVB) and some other U.S. banks is unlikely to impact Sweden’s financial stability, Sweden’s financial watchdog said on Monday.

The Financial Supervisory Authority (FI) said in a statement it was in close contact with Swedish insurers, banks and pension providers to get a better understanding of their exposure to troubled U.S. banks.

“Our assessment is that none of them have any large direct exposure of their own to the U.S. banks that have run into problems,” it said.

While the U.S. banking market was hit by a degree of turbulence, Swedish banks are regulated more tightly to ensure liquidity buffers are in place and balance sheets are protected, it added.

“Our assessment is however that the stability of the Swedish financial system is not affected by this,” acting FI Director-General Susanna Grufman said.

At least one Swedish pension firm, however, looks to have lost money in the collapse of two U.S. banks in recent days.

Pensions group Alecta has around 12 billion Swedish crowns ($1.12 billion) in investments in Silicon Valley Bank and Signature Bank, news agency TT reported.

“It is likely that those investments must be seen as lost,” Alecta spokesman Jacob Lapidus was quoted as saying. Alecta did not immediately respond to Reuters’ request for comment.

The pensions firm has around 1.2 trillion crowns in assets under management. In a statement on Friday, Alecta said it had around 9 billion crowns invested in SVB. It said the effect on individual savers future pensions would be “very little” and that its own financial position was “very strong”.

Swedish investment firm Kinnevik said separately a limited number of companies it invested in were exposed to some extent and that it made available short-term funding to ensure no material business disruptions occurred. 

Sweden’s Financial Markets Minister Niklas Wykman said the government was following developments carefully.

“Up to now we do not see any spread of the effects into the Swedish financial system,” Wykman told Reuters.

“In terms of the broad economy, it shows that it is very important to have tight regulations for the financial sector … and that we are prepared for potential risks that could be realized.”

(Reporting by Terje Solsvik, editing by Anna Ringstrom and Niklas Pollard)


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