Major Finnish investors seek to calm worries about financial crisis

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The crisis on the US financial market spread over the Atlantic during the weekend, with share prices falling all over Europe. Governments had to intervene to rescue four banks.
      The investment managers of two of Finland’s largest investors, the pension insurance companies Ilmarinen and Varma, believe that many more interventions in banking will be needed in Europe.
      Risto Murto, head of investment at Varma, believes that the deteriorating cyclical situation has worsened the situation for banks.
      The market is not ready to give its own capital, or outside capital to banks. Investors who went to capitalise crisis banks in the United States and Britain have now lost nearly everything.
     
In the danger zone in Europe are banks that have taken out short-term credit, and need more capital.
      “The crisis is now at a level that the strong banks will probably take control of the worst crisis banks. States are probably involved in these arrangements as well”, said Ilmarinen’s deputy CEO Timo Ritakallio.
     
On Monday the Icelandic government had to intervene to rescue Glitnir Bank. Johannes Schulman, CEO of the Finnish Glitnir Corporation, emphasised that the Finnish operations are unaffected. by the move. He noted that the Finnish Glitnir Bank, which has about 17,000 Finnish depositors, is separate from its Icelandic parent company.
      “Not a single euro of our customers’ money is in Iceland”, Schulman said on Monday.
      Jukka Vesala, deputy director of the Financial Supervision Authority (RATA) said on Monday that “in light of present information”, Glitnir in Finland is able to meet its obligations.
     
Ilmarinen’s Timo Ritakallio says that Finns need not be worried about their bank deposits.
     
On Tuesday, shares in Europe turned broadly upwards once again after Monday's sharp falls.
      In Helsinki, which had seen a 5% decline during Monday's hectic session, the OMX allshare index was up around 0.8% at noon, and the weighted OMX Helsinki 25 index of the most-traded stocks was 1.5% in positive territory.
      Nokia, the dominant stock on the Helsinki bourse, had put on around 1% after losing nearly six per cent of its value on Monday.


Previously in HS International Edition:
  Limited impact of Lehman Brothers bankruptcy on Finnish investors and bank customers (16.9.2008)

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