UPDATE 2-Swedish bank HQ in liquidation after losing licence

* Shares drop 80 pct after liquidation decision

* Shareholder Oresund shares also fall sharply

* Court-appointed liquidator to seek buyer for HQ

* Broader bank sector mixed, in line with market

(Adds analyst quote, SEB, details)

By Patrick Lannin

STOCKHOLM, Aug 30 (Reuters) - Swedish investment and private bank group HQ Bank AB (HQ.ST) went into liquidation on Monday after bank supervisors cancelled its licence amid sharp criticism and it failed to find a buyer over the weekend.

The closure of the bank, which shut its trading arm in June following big losses, caused few ripples in the wider bank sector, although HQ's shares plummeted 80 percent. Shares in large shareholder Oresund (ORES.ST) also fell nearly 15 percent.

The liquidator said he aimed to find a buyer for the bank, while the company said: "The process for the forced liquidation of HQ Bank has begun."

Sweden's Financial Supervisory Authority (FSA) cancelled HQ's bank licence on Saturday, saying the bank had broken "some of the most basic rules". [ID:nLDE67R03M]

It said these included unacceptable shortcomings in controlling its trading operation and taking "such large risks that the company endangered its own survival".

The FSA has said it sees no wider impact on financial stability and Maths Liljedahl, bank analyst at Nordea, agreed.

"They have failed at risk management and other things, but that is nothing that applies to any other bank, so I see it (impact) as very limited," he said.

By early afternoon, shares in the top four banks Nordea, (NDA.ST) SEB, (SEBa.ST) Handelsbanken (SHBa.ST) and Swedbank (SWEDa.ST) were all down slightly, in line with the market.

The FSA said HQ Bank had about 20,000 investor accounts. Some 900 clients had deposits over the level guaranteed by the state, which is up to 50,000 euros, it added.

HQ closed its trading unit this year at a cost of 1.2 billion crowns ($162.4 million). [ID:nLDE65S0CK]

The FSA said in its decision that this loss was in contrast to comments to the FSA by HQ during the probe that it only needed 33 million crowns to cover market risks.

"...lacks in the bank's risk management have been large and to a great extent depended on the fact that the board and the chief executive failed to acquire the necessary knowledge and information on the bank's trading operation and in particular the risks linked to this operation," the FSA said.

SEEKING BUYER

Investment group Oresund, which had 24.5 percent of HQ as of the end of 2009 and which this year bought HQ's investment funds, said it had total exposure of 749 million crowns to HQ Bank. The FSA's decision on HQ Bank has no effect on HQ Fonder, it added. Oresund shares fell almost 15 percent.

SEB said its credit exposure to HQ was 141 million crowns, securities lending of a nominal value of 600 million crowns and settlement guarantees of 307 million.

Swedbank said it had an exposure of 88 million crowns to HQ, which it said was secured with cash and shares.

Bjorn Riese of law firm Mannheimer & Swartling, appointed as liquidator of the bank and in practice replacing the chief executive and the board, said he wanted an orderly process.

"... but the main track is naturally to try to dispose of the bank and try to find someone who can drive operations further," he told a news conference.

The Dagens Industri (DI) newspaper reported unnamed sources as saying the FSA had vetoed a deal between HQ and brokerage Carnegie, itself nationalised during the financial crisis in 2008 and then sold to private equity firms in 2009.

DI's sources said Nordea, Handelsbanken, SEB and private equity fund EQT had been part of discussions over HQ at a price tag of about 650 million crowns versus a market capitalisation of 1.55 billion crowns at the close on Friday. (Additional reporting by Sven Nordenstam and Victoria Klesty; Editing by Dan Lalor, Mike Nesbit)