Kaupthing Edge update

With events moving so quickly it’s difficult to keep track of critical events.  There’s some interesting stuff on Reuters this morning regarding Icelandic events:

The Swedish central bank said it would grant liquidity assistance to the Swedish arm of Icelandic bank Kaupthing with a loan of up to 5 billion crowns ($702 million). The central bank said it had judged the unit, Kaupthing Bank Sverige, was solvent, but conditions in the Icelandic banking industry made it difficult for it to meet its payment obligations.

“In the situation that has arisen there is an imminent risk that the bank may suffer liquidity problems,” the central bank said in a statement.

So they are suggesting that Kaupthing’s issue is purely liquidity.  Remember that this is in reference to the Swedish arm of Kaupthing.  Bloomberg on the same topic adds:

Kaupthing has put the Swedish subsidiary up for sale, joining other Icelandic banks in scaling back international operations as the credit crisis hits the Atlantic island.

Meanwhile, it is not clear whether or not Glitnir will survive despite last week’s announcement that the government would nationalise it:

Oddsson late on Tuesday raised the prospect that the goverment might not pump money into Glitnir after all.

“The state will not inject new capital into the bank unless there is actually a bank,” Oddsson said, referring to a shareholders’ meeting which is slated for Saturday.

The rest of the Reuters article can be found here.


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