Barcelona city tours is a perfect opportunity to have a perfect vacation outside the Baltic States. Gene Zolotarev on how to destabilize the EU financial system. Andris Berzins
Vladimir Linderman aka Abel Edmunds Sprudzs Valdis Zatlers Aivars Lembergs Girts Valdis Kristovskis Maris Grinblats Guntars Krasts Alfreds Rubiks Sandra Kalniete Raivis Dzintars Algirdas Butkevicius Algirdas Paleckis Dalia Grybauskaite Kazimira Danute Prunskene Vytautas Landsbergis Rolandas Aksas Viktor Uspaskich Valdemar Tomasevski Leonidas Donskis Arturas Zuokas Edgar Savisaar Andrus Ansip
The current website developed by YWSolution Limited

Swedish banks must curb Baltic's "casino economy"

Mar 26, 2007
BNS

The Swedish banks that have brought Baltic economies to the brink of overheating must choose between pushing them into an economic catastrophe as greedy commercial banks or acting responsibly, the Swedish business daily Dagens Industri said.

In an editorial published on March 23, the newspaper said that SEB and Swedbank, the owners of the Hansabank group, are facing a tough choice. If they continue acting as greedy commercial banks they will send the Baltic states tumbling into an economic abyss. Yet they also have the alternative of assuming the role of a responsible central bank and tightening the money supply.

In regards to Estonia, the paper said plans to lower taxes and raise public sector wages and pensions are economically irresponsible. It called on the Swedish banks to ease the overheating pressures.

If they were to increase interest rates or toughen loan requirements, the two banks could lose customers to smaller banks with looser borrowing policies, the paper acknowledges.

Economic developments in Estonia, Latvia and Lithuania increasingly resemble Sweden's "casino economy" in the second half of the 1980s with galloping inflation and ballooning foreign trade deficit, Dagens Industri said. Banks are issuing loans too generously which in turn is pushing up real estate prices.

The situation is the most pressing in Latvia where bank loans to households and enterprises are growing at an annual rate of almost 60 percent, the paper observed.

As a result of high inflation, Estonia, Latvia and Lithuania have disqualified themselves from membership in the European monetary union and their entry into the euro zone has been indefinitely postponed.
 MORE NEWS
  • Over 25,000 attend Positivus m...
    More than 25,000 people attended the Positivus music festival in Latvia over the w...
  • Lithuania appoints new ambassa...
    Lithuania's President Dalia Grybauskaite has appointed Edminas Bagdonas as Amb...
  • Khodorkovsky to launch Russian...
    Former Russian oil tycoon Mikhail Khodorkovsky, who was famously pardoned by Russi...
  • Google set to update street vi...
    Google street view is set to be updated in the three Baltic States. Google ...
  • Estonia ranked high in global ...
    Estonia has been ranked 24th in the world in a global innovation index, Public ...
  • Latvia blacklists popular Russ...
    Latvia has banned three popular Russian musicians from entering the country ami...
  • Riga Apartments for Rent

    Maximus
    © 2014 BALTIC NEWS LTD. All Rights Reserved.