Swedish state takes over Carnegie
TT/The Local · 10 Nov 2008, 15:06
Published: 10 Nov 2008 15:06 GMT+01:00
- Carnegie announces new share issue (10 Nov 08)
Meanwhile, the National Debt Office (Riksgälden) informed Finansinspektionen that it intends to take over ownership of Carnegie.
“In the current climate on the financial markets it is good that the Debt Office is now giving support to Carnegie and is prepared to go in as owner to safeguard financial stability," said Deputy Governor Svante Öberg in a statement.
If the Debt Office carries out its takeover plans, Finansinspektionen said it will reconsider the sanctions.
“Finansinspektionen finds, however, that the National Debt Office’s takeover makes it possible to find a long-term solution for Carnegie and therefore sees that it is possible to change the revocation to a warning,” said Finansinspektionen in a statement.
The Debt Office’s takeover can, according to Finansinspektionen, be seen as a liquidation with the option of a sale carried out in an orderly fashion and with secure financing.
The Debt Office’s involvement follows guidelines laid out in Sweden’s recent financial stability package giving the agency primary responsibility for administering assistance to the country’s troubled banks.
Specifically, the Debt Office has offered Carnegie a loan of up to 5 billion kronor ($646 million) which replaces the liquidity assistance previously extended to Carnegie by the Riksbank.
Finansinspektionen has been looking into failings in Carnegie’s internal management and controls, as well as the bank’s large exposure to one individual customer, who according to media reports is finance mogul Maths O. Sundqvist.
According to the bank’s quarterly report, Carnegie’s dealings with Sundqvist may have led to 1 billion kronor ($129 million) in credit losses.