Here is a link to some in depth coverage of the Latvia-Sweden situation written on June 17, 2009 (not by me):

http://www.oid-ido.org/article.php3?id_article=988

As for the transfer of risk to the IMF, we are assuming the IMF steps in for Latvia. Really, it is the taxpayer who is on the hook here because Latvia is socializing losses that Swedish banks would have taken.

You translated this as:

The Bankers’ Association made a proposal to provide a moratorium, that is, a temporary deferral, in the case of payments on debts to private persons.

I would translate this a bit differently:

The Bankers’ Association made a proposal to provide a moratorium, that is, a temporary concession, in the case of amortizing loan payments on debts to private persons.

In other words the loan holders will be able to make interest-only payments for a time but the loan amounts will remain unchanged.

This article seems to be based on loose babble between Swedish banks, who still think they will be able to collect their money, and the Latvian government, who still think they can avoid devaluing their currency. (Or think they can avoid devaluing it until after they receive the IMF loans).

What the Swedish banks seem to be after is a Latvian government guarantee of their loans, and I assume this would be drawn from IMF loans to Latvia, in return for a temporary suspension of loan amortization payments in lieue of interest-only payments for a period of time.

As an expat yank living in Sweden I can say that my experience here is that the business acumen, particularly in the banking sector, is quite low when compared to countries like the UK, Canada, and the USA. Swedish banks do not understand the reality facing them. They still believe that someone 'must' come to their rescue. Their first attempt, as shown in the article quoted, is to go after IMF loans to the Latvian government via a Latvian government guarantee. The backup position is the $100 billion IMF credit line sought recently by the Swedish government as a backstop for SEB and Swedbank.

Unfortunatley the losses these banks are about to experience dwarfs this amount and no amount of Latvian or Swedish government guarantees will change this. Head-in-the-sand is business as usual in these little Scandinavian contries. One would think Sweden would have learned from the result of their Icelandic cousins' recent experiences. Such is unfortunately not the case.

Here is a link to some in depth coverage of the Latvia-Sweden situation written on June 17, 2009 (not by me):

http://www.oid-ido.org/article.php3?id_article=988

As for the transfer of risk to the IMF, we are assuming the IMF steps in for Latvia. Really, it is the taxpayer who is on the hook here because Latvia is socializing losses that Swedish banks would have taken.

You translated this as:

The Bankers’ Association made a proposal to provide a moratorium, that is, a temporary deferral, in the case of payments on debts to private persons.

I would translate this a bit differently:

The Bankers’ Association made a proposal to provide a moratorium, that is, a temporary concession, in the case of amortizing loan payments on debts to private persons.

In other words the loan holders will be able to make interest-only payments for a time but the loan amounts will remain unchanged.

This article seems to be based on loose babble between Swedish banks, who still think they will be able to collect their money, and the Latvian government, who still thinks they can avoid devaluing their currency. (Or think they can avoid devaluing it until after they receive the IMF loans).

What the Swedish banks seem to be after is a Latvian government guarantee of their loans, and I assume this would be drawn from IMF loans to Latvia, in return for a temporary suspension of loan amortization payments in lieue of interest-only payments for a period of time.

As an expat yank living in Sweden I can say that my experience here is that the business acumen, particularly in the banking sector, is quite low when compared to countries like the UK, Canada, and the USA. Swedish banks do not understand the reality facing them. They still believe that someone 'must' come to their rescue. Their first attempt as shown in the artilce quoted is to go after IMF loans to the Latvian government via a Latvia government guarantee. The backup position is the $100 billion IMF credit line sought recently by the Swedish government as a backstop for SEB and Swedbank.

Unfortunatley the losses these banks are about to experience dwarfs this amount and no amount of Latvian or Swedish government guarantees will change this. Head-in-the-sand is business as usual in these little Scandinavian contries. One would think Sweden would have learned from the result of their Icelandic cousins' recent experiences. Such is unfortunately not the case.