It's not all about management
SUPPLEMENT - NORDIC REGION - May 01, 2008
Swedish banks have gone unscathed by the credit crunch. This is because of their business model, not their managers, say Carl Schwieler and Björn Sjöberg of DLA Nordic
While the continuing crisis in the international financial markets and the attendant credit crunch have not gone unnoticed in Sweden, most Swedish banks have by and large avoided the worst effects of these phenomena. The fact that most Swedish banks have thus far got away relatively unscathed is primarily due to the business model of our banks. Most banks (including the big four) are at heart commercial and/or retail banking operations with relatively small capital markets divisions. The security portfolios of Swedish banks are primarily held for liquidity purposes and are not a major part of the business mix. Superior management, then, has had little to do with the fact that the balance sheets of Swedish banks are in good shape and that they are still very much open for business on otherwise unpopular credit lines such as leveraged loans.
Although true in some respects, the rosy picture of...
The rest of this article is available to subscribers only. Subscribe today for full access to this article.
Alternatively take a free trial, giving you access for 48 hours*.
If you are already a subscriber, please log in below to access the rest of this article.
*some articles may be excluded.