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cobben
01-18-09, 07:02 PM
I'll bet you thought this would be about the Swedish currency:
Swedish crowns, svenska kronor, or "SEK" in the forex world.

Well, it is, though indirectly, for now - we'll get there.

But there is actually another lesser-known SEK.
I'll start this thread out with an overview of how SEK works, as it is a key player in how Sweden works. I have highlighted some key phrases.
Please note that as an orientation, Sweden is probably more Asian/Japanese than American in many ways.

I am quite interested in others' views of "how Sweden works", especially from the financial point of view. I am trying to put together some sort of risk-asessment of Sweden, not only internally, but especially with respect to possible further and accelerating external shocks, such as of the Icelandic debt collapse character.

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Swedish Export Credit Corporation (SEK)
http://www.sek.se/templates/page___342__EN.aspx

Our mission

The mission of the Swedish Export Credit Corporation (SEK) is to secure access to financial solutions for export and infrastructure.

The world according to SEK

SEK carries out its mission in a world where the export share of Sweden’s GDP is about 50% and a determinant factor for Sweden’s economy. Swedish industry and trade depends on a number of factors to remain internationally competitive. Access to financial solutions and financial advisory services are among the important factors. Swedish companies also need environmentally friendly and efficient infrastructure, successful research and competent labor.

It is against this background that SEK delivers financial services, from simple credits to innovative financial solutions
. . .

SEK provides medium- and long-term credit facilities for exports and infrastructure. The business is mainly run on a commercial basis. SEK is tasked by the state to administrate the Swedish system for state-supported export credits at fixed rates of interest.

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Interim Report Jan - Sep 2008 (http://www.sek.se/upload/Finansiella%20rapporter/SEKQ3_eng_final.pdf)


Cooperation in the interest of Sweden
. . .
However, SEK cannot single-handedly manage the increased demand for financing now coming from

Swedish export companies. Our liquidity is high but our balance sheet is limited, as is our risk capacity.
Meanwhile, the Swedish banks still have a relatively high risk capacity, which means that together we can
support Swedish companies much more effectively than we could if each of us acted alone.
It is currently difficult for most countries‟ export industries to borrow money. If, together with the Swedish
banks, SEK can provide Swedish companies with access to long term financing, the crisis could lead to the
Swedish export industry being able to further increase its market share.
The important thing now is to do what is right for Sweden and, in the long term, its prosperity, which is in the interests of everyone in Sweden.
__________________________________________________
The Swedish National Debt Office ( = Treasury)
Larger budget deficit and increased borrowing (https://www.riksgalden.se/templates/RGK_Templates/NewsPage____17412.aspx)
2009-01-15
. . .
The Debt Office does not normally revise its forecasts between ordinary forecast occasions. However, we consider that developments in the recent period have been so exceptional that we should now give an indication of our assessment of the borrowing requirement for 2009 and 2010
. . .
The Riksdag, Sweden's Parliament, has authorised the Government to provide Swedish Export Credit Corporation with a credit facility at the Debt Office of SEK 100 billion. The Government has not yet made a decision on how this facility is to be used. The Riksdag has also authorised the Government to provide Swedish Export Credit Corporation with a credit guarantee facility from the Debt Office. It is therefore difficult to assess the extent to which Swedish Export Credit Corporation's credit facility will be used. If the facility is used, it will entail a further increase in the central government borrowing requirement.
. . .