Swedish banks must review risks in Baltic countries

The ECB has pointed out the significant shortcomings in both banks' risk management.

Both Swedbank and SEB have taken steps to address the ECB's warnings, according to the sources. Bank managements have announced that they are reviewing their risk models, which in turn determine how much equity the banks must hold in their lending.

Neither the ECB nor any of the major Swedish banks have wanted to comment on the information.

Although the ECB is not the overcoat of Swedish banks, since Sweden is not part of the European monetary union, the ECB supervises the activities in the Baltic countries, which all have the euro as their currency.