Swedbank Buy Greek Bonds With Estonian Money

According to the Estonian news paper Äripäev, the Swedish bank Swedbank recently invested 185 million kroons or 5% of its assets in Greek bonds , another 5% in Italian bonds and 15% in Lithuanian government bonds through its Baltic pension fund.

“A number of large European banks have built up significant positions in Greek government bonds which means that they play an important role in ensuring European banking stability.”

Agnes Makk


In spite of problems in the Greek economy, some Estonian pension funds purchased Greek government bond as recently as last month, the news paper report.

Swedbanks Baltic daughter bank, Hansabank, accounts for half of the market for second-pillar pension funds in the region.

Agnes Makk, head of Swedbank’s investment fund division, explains that the fund purchased Greek bonds at the end of January when they carried 7% interest rate.

Makk says that there were three reasons why Swedbank invested in Greek bonds: Firstly, Greece has limited short-term liquidity risk in budget financing since only a small amount of government bonds are redeemed this year.

Secondly, a number of large European banks have built up significant positions in Greek government bonds which means that they play an important role in ensuring European banking stability and mean that there could be rescue packages available.

Third reason is that Greece government has recently focused on resolving its budget problems.

Such positive opinion is not shared by SEB whose fund manager Vahur Madisson explains that the confidence of financial markets toward Greece continues to erode and it is not clear what will happen if Greece were to default.

“We made our first and last investment in Greek bonds last November and sold it in two months,” said Madisson.

Source: balticbusinessnews.com

Related by the Econotwist:

Estonia Put Pressure On Journalists

Baltic Countries Remain In Recession

Estonian Company Claims $130mill from SEB

How Sweden sent Estonian economy into free fall

“SEB Robbed Customers,” Whistleblower Says

Swedbank In Estonia: “Daylight Robbery”

Swedbank Reports Record Loss of SEK 10,5bn

Baltic losses of Swedish banks at 3.7 billion dollar

Nordic Central Banks Agree On Baltic Bank Bailout

How To Make A Rat Look Like A Puppy

Why Should EU Bail Out Greece?

End Of The European Upswing?

Germany Organizing Greek Bailout

Traders Short Record Amount of Euro

Global Markets: “The Fear Is Still Out There”

Denmark In Danger Of Becoming The “New Greece”

The Greek Bond Bomb Keeps Ticking

And The Euro Came Tumbling Down

Greece: From Bad To Worse?

Reblog this post [with Zemanta]

0 thoughts on “Swedbank Buy Greek Bonds With Estonian Money

  1. naturally like your web site however you have to take a look at the spelling on quite a few of your posts. A number of them are rife with spelling issues and I to find it very troublesome to tell the truth however I will certainly come back again.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s