Riksbank: crisis ‘clearly affecting’ Sweden

Riksbank: crisis 'clearly affecting' Sweden
The Riksbank’s top two officials have publicly acknowledged that the global financial crisis has arrived in Sweden as they announced an additional lending facility to help ease up tight credit markets.

“Sweden has so far been spared the worst. But now the financial markets in Sweden are also clearly affected by the uncertainty and lack of confidence, which thus also affects the Swedish banks and other financial agents,” said First Deputy Governor Irma Rosenberg in a speech at Statistics Sweden on Thursday.

Rosenberg’s concern was echoed by Riksbank head Stefan Ingves in a separate statement detailing the Riksbank 60 billion kronor ($8.5 billion) credit facility.

“The international financial turbulence is now clearly affecting the financial markets in Sweden, Swedish banks and other financial market participants,” said Ingves.

While Sweden’s banks remain well-capitalized and have limited loan losses thus far, Ingves warned that problems in long-term credit markets could cause problems for Swedish banks, companies, and households.

“The Riksbank is now taking measures to facilitate the supply of credit. If the situation were to deteriorate, the Riksbank and other government agencies are well-prepared to deal with the problems,” he said.

The new lending facility totaling 60 billion kronor will be made available through an October 6th auction. An additional auction is planned for October 27th.