Swedish banks consider lawsuit against Norwegian competitor

Sweden’s major banks want to sue the DNB Nor bank to recoup losses on Norwegian government bonds purchased from Norway’s largest bank.

The banks contest that DNB Nor had inside information about the Norwegian government’s plans for addressing the financial crisis, leading DNB Nor to sell large quantities of Norwegian state bonds just days before the measures were announced.

In addition to Sweden’s Handelsbanken, Swedbank, SEB, and Nordea banks, Norway’s Fokus bank is also considering a lawsuit, reports the Norwegian newspaper Verdens Gang.

According to the economic news website E24, none of the banks want to comment on the matter, but instead point to an investigation launched by the Norwegian financial authorities into whether or not DNB Nor violate insider trading rules.

According to reports in the Norwegian press, DNB Nor sold bonds worth 2.6 billion Swedish kronor ($342 million) on October 9th and 10th, generating a profit of about 80 million kronor.

The value of the bonds dropped significantly just a few days later when the Norwegian government announced its package of measures to combat the effects of the financial crisis.

Nordea, which is Norway’s second largest bank behind DNB Nor, as well as Swedbank, are also among a number of banks that are dissatisfied with Norway’s crisis package, alleging that it’s in tailor made to benefit DNB Nor.