Nordic Business Report-June 14, 2006-Icelandic investments in Sweden support Iceland's economy - claim
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Recent Icelandic investments in Sweden have been successful and supportive to Iceland's unstable economy, according to Stefan Ingves, governor of the central bank of Sweden.
This was revealed in a speech given by Ingves on Tuesday (13 June) at a seminar in Brussels, arranged by the National Bank of Belgium, on whether regional financial sector assessments can provide additional value to the European Union countries.
"Icelandic investors have bought large stakes in Swedish financial firms. The investments are rather small from the Swedish point-of-view but significant for their parents in Iceland," Ingves said.
"Recently, there has been volatility in the Icelandic financial and currency markets. Luckily, the investments in Sweden are doing very well and have rather contributed to strengthening the Icelandic financial system," he added.
"But in another situation the reverse could have been true had the Icelanders made these investments during the Swedish banking crisis in the 1990s the Swedish holdings would have contributed to weakening the Icelandic economy," Ingves noted.
Ingves suggested that in addition to analysing the vulnerabilities of individual countries and macro-economics, it is also important to examine major multinational financial groups and companies' foreign assets.
Glitnir Bank recently acquired Swedish stock broker Fischer Partners and Kaupthing Bank acquired Swedish financial company JP Nordiska in 2002, while Landsbanki recently sold its shares in investment bank Carnegie.
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