Event risk in the Baltics is critically high

| 28 May 2009 11:11

This is the assessment of den Danske Bank as reported by Edward Hugh.  The last time I mentioned the Baltics was on May 12th in my post “A bearish view on Eastern Europe.”  I ended saying the Scandinavian banks’ exposure to the Baltics is just as worrying and should be the place to watch before we give a definitive all-clear.”  And that all-clear signal is far from coming.  In fact things seem to be reaching a critical state.

Here’s what den Danske Bank says:

The event risk has risen sharply in the Baltic markets and we advise utmost caution. Yesterday, the Swedish central bank Riksbanken said it will increase its currency reserve by SEK 100 bn through a loan from the Swedish debt agency. Investors seem to believe that this is a buffer to deal with potential problems arising from the Baltic crisis.

We should be watching these developments in Scandinavia and the Baltics because things have a way of metastasising in this globalized economy. Read more at the link below.

Source

Danske Bank Warn On The Baltics – Edward Hugh

see also Devaluation Imminent in the Baltics? by Claus Vistesen (notice the allusions to Argentina, a comparison I made last July.

avatar About Edward Harrison

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages, a skill he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

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