U.S. bank woes no threat to Swedish financial system, watchdog says

OSLO (Reuters) -The recent collapse of some U.S. banks, including Silicon Valley Bank (SVB), does not threaten Sweden’s financial stability, the country’s financial watchdog said on Monday.

The Financial Supervisory Authority said in a statement it was in close contact with Swedish insurers, banks and pension providers to get a better understanding of their exposure to troubled U.S. banks.

“Our assessment is that none of them have any large direct exposure of their own to the U.S. banks that have run into problems,” it said.

While the U.S. banking market was hit by a degree of turbulence, Swedish banks are regulated more tightly to ensure liquidity buffers are in place and balance sheets are protected, it added.

“Our assessment is … that the stability of the Swedish financial system is not affected by this,” it said.

At least one Swedish pension firm, however, lost money in the collapse of SVB and Signature Bank (NASDAQ:). Alecta has invested some 12 billion crowns ($1.1 billion), corresponding to around 1% of assets under management, in the banks.

“Alecta now values the shares in the two banks at zero,” it said in a statement, adding that the effect on Alecta’s customers would be small and its own financial position was “very strong”.

Swedish investment firm Kinnevik said separately a limited number of companies it invested in were exposed to some extent and that it made available short-term funding to ensure no material business disruptions occurred. 

Sweden’s Financial Markets Minister Niklas Wykman said the government was following developments carefully.

“Up to now we do not see any spread of the effects into the Swedish financial system,” he told Reuters.

“In terms of the broad economy, it shows that it is very important to have tight regulations for the financial sector … and that we are prepared for potential risks that could be realized.”