STOCKHOLM, June 17 (Reuters) - Sweden’s Handelsbanken has placed a large sum of money in an account at the Riksbank in a bid to help the central bank safeguard the financial system, a Swedish paper reported on Wednesday.
The bank has set aside over 100 billion Swedish crowns ($12.75 billion) at the central bank, to be tapped if the country’s financial crisis worsens and in case of a severe liquidity crunch, business daily Dagens Industri reported, quoting sources.
“It is true that we have recently lent a significantly larger amount to the Riksbank than normal,” Handelsbanken’s chief financial officer, Ulf Riese, was quoted as saying in the paper, though he declined to give a precise amount.
Sweden’s central bank said last month it would boost foreign currency reserves by 100 billion Swedish crowns ($13.3 billion) to allow it to lend banks foreign currency, a move seen as a line of defence against potential fallout in the Baltic region where Swedish banks have built up large exposures.
“Given the troubled times we are facing, we should ensure that there is adequate liquidity,” Riese said.
Handelsbanken has steered clear of major loan losses in the face of the global financial crisis, but rivals SEB SEBa.ST and Swedbank SWEDa.ST have made large provisions to cover souring loans in the Baltics and in Eastern Europe.
On Tuesday, Fitch Ratings said it affirmed Handelsbanken’s AA- rating, saying it had a “resilient” track record despite the challenging economic climate.
The Riksbank said earlier this month it was borrowing 3 billion euros ($4.2 billion) from the ECB, a move designed to give it breathing space while it built up foreign currency reserves. (Reporting by Stockholm Newsroom; Editing by Gary Hill)
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