Libor scandal prompts calls for probe in Sweden
Calls are mounting in Sweden for a review of the country's interbank lending system following revelations about alleged manipulation of the London interbank offered rate (Libor).
Following news that Barclay's bank manipulated the Libor rate, used by banks in London to set interest rates charged when lending to other banks, the Swedish Property Federation (Fastighetsägarna) has demanded an investigation into how a similar system works in Sweden.
The group claims that banks in Sweden might also have reason to charge customers higher rates than are warranted, Sveriges Television (SVT) reported.
One reason why the Property Federation wants the probe is that Sweden has one of the largest gaps in the western world between the benchmark interest rate set by the central bank and rates charged on inter-bank loans – known in Sweden as the Stockholm interbank offered rate (Stibor).
"If it's happened [in England], it can happen here and we must bring be able to clarify that it hasn't happened. It's important to put the question on the table, in any case," the federations chief economist, Tomas Ernhagen, told SVT.
But the Riksbank, which has followed Sweden's interbank rates for a relatively long period of time, doesn't believe there are any irregularities with the Stibor rate, Riksbank head Stefan Ingves said in a recent press conference.
According to Annika Falkengren, head of the SEB bank, Sweden's relatively high interbank lending rate is a consequence of how the central bank has reacted to the issue.
"Sweden is one of the few countries that hadn't had injections of liquidity," she told the TT news agency, comparing Sweden to other European countries which have received additional liquidity from the European Central Bank (ECB).
She added, however, that Sweden has a lower level of liquidity in its financial system compared to other countries.
"Sweden hasn't been doping," she said, employing a common metaphor referring to athletes who inject performance enhancing drugs.
On Monday, the 3-month Stibor rate was at 2.08 percent, compared to 2.56 percent a year ago, according to the Riksbank.
In July 2008, the Stibor rate was at 5 percent.
The rate is calculated as an average of the rates charged on loans banks make to one another and is calculated daily.
According to the Riksbank, one reason that the differences between the interbank rate and benchmark interest rates are larger in Sweden is that Swedish banks have a great deal of financing in foreign currencies.
TT/The Local/dl
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Following news that Barclay's bank manipulated the Libor rate, used by banks in London to set interest rates charged when lending to other banks, the Swedish Property Federation (Fastighetsägarna) has demanded an investigation into how a similar system works in Sweden.
The group claims that banks in Sweden might also have reason to charge customers higher rates than are warranted, Sveriges Television (SVT) reported.
One reason why the Property Federation wants the probe is that Sweden has one of the largest gaps in the western world between the benchmark interest rate set by the central bank and rates charged on inter-bank loans – known in Sweden as the Stockholm interbank offered rate (Stibor).
"If it's happened [in England], it can happen here and we must bring be able to clarify that it hasn't happened. It's important to put the question on the table, in any case," the federations chief economist, Tomas Ernhagen, told SVT.
But the Riksbank, which has followed Sweden's interbank rates for a relatively long period of time, doesn't believe there are any irregularities with the Stibor rate, Riksbank head Stefan Ingves said in a recent press conference.
According to Annika Falkengren, head of the SEB bank, Sweden's relatively high interbank lending rate is a consequence of how the central bank has reacted to the issue.
"Sweden is one of the few countries that hadn't had injections of liquidity," she told the TT news agency, comparing Sweden to other European countries which have received additional liquidity from the European Central Bank (ECB).
She added, however, that Sweden has a lower level of liquidity in its financial system compared to other countries.
"Sweden hasn't been doping," she said, employing a common metaphor referring to athletes who inject performance enhancing drugs.
On Monday, the 3-month Stibor rate was at 2.08 percent, compared to 2.56 percent a year ago, according to the Riksbank.
In July 2008, the Stibor rate was at 5 percent.
The rate is calculated as an average of the rates charged on loans banks make to one another and is calculated daily.
According to the Riksbank, one reason that the differences between the interbank rate and benchmark interest rates are larger in Sweden is that Swedish banks have a great deal of financing in foreign currencies.
TT/The Local/dl
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