Chapter 1524: 200 billion to save the market!

The Swedish stock market has more than 200 listed companies, which is not a small scale in Europe.

Facing the large-scale international capital selling behaviour, which triggered the man-made stock market crash.

To hold the market up, there is no doubt that the focus has to be on the constituent stocks of the Stockholm 30 Index.

These are the wind vane!

But the prices of these 30 stocks had already been driven up by speculation, and the market value of several leading companies had soared to more than 80 billion Swedish kronor.

Although they have now been affected, causing the market value to fall below 80 billion Swedish kronor, and it is still falling rapidly.

But the funds needed to absorb such a huge release are terrifying.

Simply relying on the spontaneous actions of already frustrated financial companies simply won't work.

In order to avoid the financial systemic risks caused by the stock market crash

and even further social unrest.

The Swedish government acted decisively and promptly, summoning key figures from relevant departments and the financial industry to a meeting at the Prime Minister's Office.

The aim was twofold.

One was to consolidate ideas and boost morale, and the other was to immediately negotiate an effective policy to save the market.

Very quickly.

In the conference room of the Prime Minister's Office, five people sat around the table, and in the chairs around the outside, there was a circle of staff.

The four people in the government were Prime Minister Ingvar Carlsson,

Harald Quinton, Governor of the Swedish Central Bank.

Yoran Peltonen, Swedish Minister of Finance.

Steve Kaman, Director of the Swedish Financial Authority.

The remaining one is, without a doubt, Peter Wallenberg.

At a critical moment, the only person who can participate in policy formulation who is not a big shot in politics is Peter Wallenberg.

Considering the urgency of the situation, no one said much.

Ingvar Carlsson went straight to the point: 'The topic of this meeting is one and only one – saving the market!'

'The man-made stock market crash has already happened, but we must minimise the impact. We must not only protect our financial system and the ecology of the industry, but also boost the confidence of shareholders and even other residents.'

'This is about the credibility of our government and the foundation of our governance!'

Ingvar Carlsson deliberately emphasised the last word and lengthened his intonation.

The government officials present looked at each other and nodded in unison.

If Ingvar Carlsson couldn't become prime minister, then naturally they would have to step down as well.

Even if it's just to save their own positions, they have to do their best to cooperate.

Besides, they don't have to pay for it themselves...

The governor of the Swedish central bank spoke up without hesitation: 'In response to this crisis, if we want to support the securities companies, we need to solve their funding problems and confidence issues.'

'Funding is simple. We plan to release a total of 150 billion Swedish kronor to the market in the first phase through policies such as targeted RRR cuts of 3 percentage points, re-lending, rediscounting, and lowering the re-lending and rediscounting interest rates...'

Targeted RRR cuts are a way of lowering the minimum settlement reserve ratio for stock-related businesses. Although this will increase some risks in the long term, it is conducive to giving full play to the allocation capabilities of securities companies, reasonably deploying corporate funds, alleviating liquidity pressure, and enhancing shareholder returns and investor confidence in the short term.

Rediscounting refers to the central bank issuing loans to commercial banks based on their credit.

Rediscounting refers to the central bank issuing funds to banks using commercial bills that have not yet matured as collateral.

Funds are directly released to securities firms and banks. Naturally, banks that have money are emboldened to support securities firms, and securities firms have the confidence to take over, not to mention that the interest rates for rediscounting and relending have dropped, further reducing the cost of using funds.

The first phase of the 150 billion yuan of funds released by such policies is undoubtedly a super-strong shot in the arm for the market.

Of course, printing money and releasing it into the market, even if there is collateral, will certainly have a negative impact, such as devaluing the Swedish krona.

At this time, the Swedish government really needs the Swedish krona to depreciate.

There is also a lot of pressure on the foreign exchange market.

Ingvar Carlsson nodded with satisfaction and looked over at Finance Minister Göran Persson.

The latter immediately said, 'Mr. Prime Minister, our plan is to use the pension fund under the jurisdiction of the Ministry of Finance to enter the market. The first phase of entry into the market will reach 50 billion kronor, and a maximum of 100 billion kronor can be invested!'

The Swedish pension fund is well-known throughout Europe. It is made up of public pension funds, occupational pension funds, and personal pension funds.

In terms of asset size, it has reached more than 500 billion Swedish kronor!

It is a financial giant.

However, as a national sovereign fund, the Swedish pension fund also invests abroad, but compared with other commercial funds and investment banks, its investment approach is less aggressive.

But in today's situation, risks still have to be taken for the overall national interest.

Besides, when pension funds enter the market, it definitely has a huge boosting effect on investor confidence.

When you add the central bank to the Swedish pension fund, that's 200 billion Swedish kronor of capital entering the market.

The next person to speak was the director of the Financial Supervisory Authority, Steve Kaman.

His strategy was also very aggressive. One was to tighten the pace of IPOs, and the other was to lower the financing margin for investors to finance the purchase of securities.

One was to restrict the financing side, not to let new fish into the pool in the short term, forcing securities companies to invest their funds in the current pool.

The other is to lower the financing threshold, which is aimed at the trading side, to let in more private capital, so as to create a good atmosphere for everyone to protect the market.

After Steve Carman finished speaking,

Ingvar Carlsson looked at Peter Wallenberg and said solemnly, 'Peter, I agree with everything that can be done at the government level.'

'You heard it too, these policies are very strong.'

'But you should understand that in fact, other capital will definitely keep a close eye on your actions, and your role is very crucial in terms of how effective it can be.'

Peter Wallenberg nodded.

As the capital overlord of Sweden, he of course knew that he was the bellwether.

If he wanted others to follow suit and increase their stakes, believing that the market would protect them and that they would make a profit on their investments, then he must also increase his stakes.

As for whether or not to increase his stakes?

There was no doubt about it, he had to, otherwise he would not feel at ease and all his previous efforts would be for nothing.

Letting the share prices of these companies fall would reduce his cost of buying in, but the key was that they had to buy in themselves.

Obviously, there are enemies all around, and he can't afford to gamble.

'Ingvar, we've decided to raise funds through a mortgage and the issuance of bonds.'

'The funds will be used to buy shares for ourselves and to repurchase shares on the company's behalf.'

'Therefore, some of these funds will require the support of the central bank.'

Peter Wallenberg said, looking at the governor of the central bank, Harold Quinton.

The latter nodded with a smile: 'If neither the Zinnoida Group nor Skandinaviska Enskilda Banken are eligible for loans, I don't think any other company will be either.'

Peter Wallenberg was naturally satisfied with this response.

Then the five men discussed these policies again for a while before ending the meeting.

It would take time to formulate and roll out the policies.

And Peter Wallenberg, who had regained his confidence, also hoped that the stock price would first decrease overall and then a little more.

It just so happened that tomorrow was Friday, followed by a weekend of two days.

With a buffer of two weekend days, as long as the policy was fully announced and implemented on Monday, their pallet plan would not fail!

By the close of trading on Friday, the Stockholm 30 Index had plummeted by a quarter to 1076.3482.

And on Sunday morning,

the Swedish government held a press conference, and Ingvar Carlsson and others announced the government's series of bailout policies to the country via live television, and delivered an inspiring speech.

The first phase of the rescue package was 200 billion Swedish kronor!

And there was also a series of strong fiscal and monetary policies.

It was all very exciting!

Although the stock market was closed that day, an unknown number of people across the country were suddenly filled with motivation.

Many were already looking forward to the opening of the stock market on Monday.

Even the political and business communities in other European countries were paying close attention...