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Sweden's Riksbank grants US$126M loan to Carnegie

Sweden's Riksbank grants US$126M loan to Carnegie

Swedish investment bank Carnegie AB Monday said it has been granted a 1 billion kronor ($126 million) loan by Sweden's central bank to manage the liquidity problems it has suffered as a result of the global financial crisis.
The central bank said Carnegie is solvent but that the ongoing financial crisis has created liquidity problems for the bank.
Shares in Carnegie fell by 14.48 percent to 24.8 kronor ($3.12) after the announcement.
"Conditions in the bank sector have recently made it difficult for Carnegie to finance its payments. The bank has suffered liquidity problems," Riksbank Governor Stefan Ingves said in a statement. "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."
Carnegie's operations include stockbroking, equity analysis, equity trading, asset management and advice on corporate acquisitions.
Its chief executive, Mikael Ericson, said the nature of its business means it depends on the interbank market for short-term financing and does not have access to financing from the central bank through repurchase agreements.
"In recent weeks access to liquidity in the market has been increasingly constrained," he said in a statement.
Carnegie also said it aims to join the Swedish government's guarantee scheme, which is expected to be launched shortly, to secure medium-term financing.


Updated : 2020-12-02 16:17 GMT+08:00