RIGA - Authorities in Latvia believe white-collar criminals are deliberately sabotaging the banking system.
Kristine Apse-Krumina, aide to the Security Police chief, told the news agency LETA that police had launched a criminal investigation on Oct. 6 into the circulation of false information about Swedbank. Apse-Krumina said they were acting on information they received in the first week of October.
Financial experts wonder who stands to gain from undermining confidence in the banking system. "The most likely reason some would do that is so that they could benefit by short-selling the company's stock," a trader who works on the Tallinn stock exchange told The Baltic Times.
The trader said that to do so seems pointless, as banking shares are going down in any case.
Newsrooms across Latvia, including TBT's, have been inundated with rumors that the region's biggest bank is about to collapse.
Though the bank faces severe challenges, as does the whole financial sector (see editorial), financial experts and the banking community remain confident that a major bank in the region will not go under.
"If we look at the global turbulence, there can be rumors about nearly anything now 's some people may bet on whether the sun will rise tomorrow. We, on the other hand, present facts," Swedbank Latvia Chairman Maris Avotins said.
Swedbank's president, Jan Liden, said, "With over 4 million Swedish private customers, it's only natural that we, in both good times and bad, are the focus of the media's attention. A lot of the things being written in the media at the moment are based on capital market rumors, and we're doing everything we can to counter these rumors with facts."
Swedbank was heavily exposed to the U.S. housing market. Its exposure to the now-defunct investment bank Lehman Brothers alone was 1.3 billion dollars.
Police have refused to comment further on the situation and are not releasing any information that might impede the investigation. Police could not say when the case will be completed.
The Security Police appealed to citizens for help. Anyone with information should call 67208964.