Liquidity assistance to Carnegie Investment Bank

Date 27/10/2008

The Riksbank has decided to grant special liquidity assistance to Carnegie Investment Bank AB. Both the Riksbank and Finansinspektionen (the Swedish Financial Supervisory Authority) assess Carnegie to be solvent but that the ongoing financial crisis has created liquidity problems for the bank. 

 

“Conditions in the bank sector have recently made it difficult for Carnegie to finance its payments. The bank has suffered liquidity problems. Given the currently prevailing anxiety, the Riksbank has decided to grant liquidity assistance to Carnegie to reduce the risk of a serious disruption to the financial system,” says Governor Stefan Ingves.

 

Carnegie operations consist of stockbroking, equity analysis, equity trading, asset management and advice on corporate acquisitions. Carnegie is a large participant in the Nordic securities markets. The reasons behind Carnegie’s liquidity problems include increased collateral requirements in the wake of the financial crisis. 

 

The Riksbank’s assessment is that Carnegie Investment Bank AB (publ) is solvent. Finansinspektionen has made the same assessment. The Riksbank bases its decision on an assessment that the bank is suffering temporary liquidity problems, but that its solvency is not jeopardised. The loan is provided against collateral and provided until further notice.

 

The loan is granted by virtue of Chapter 6, Section 8 of the Sveriges Riksbank Act. This states that the Riksbank can in exceptional circumstances grant credit to banks on special terms for the purpose of supporting liquidity.

 

A press conference with Deputy Governor Lars Nyberg and Mattias Persson, Head of the Financial Stability Department, will be held today at 10 a.m. in the Riksbank. Entry via the bank's main entrance, Brunkebergstorg 11. Press cards must be shown. The press conference will be broadcast live on the Riksbank’s website, www.riksbank.se.