For fear of the Swedish Swedbank going bust, customers in Latvia have massively cleared their accounts. This was preceded by rumors spread across the Internet that the bank had liquidity problems. There is particular nervousness in Latvia about the closure of the Krajbanka two weeks ago.
Yesterday evening there was no more cash at around a third of Swedbank ATMs in Latvia, and customers had withdrawn the equivalent of around 15 million euros on Sunday. At the end of the week, rumors had spread on Facebook and Twitter that there was no more money at the Swedbank ATMs in Sweden and that the Latvian head of Swedbank, Maris Mancinskis, had been arrested. In the meantime, he assured the Latvian television station LNT TV that the rumors were "not only false, but absurd".
Swedbank spokesman Thomas Backteman also vigorously denied: "This is all completely out of thin air. Incidentally, it is a criminal offense in Latvia to spread such rumors. We are working closely with the authorities there and colleagues from other banks because we want to know who is behind it and how we can stop it. "
ATMs now refilled
In Latvia the security police took over the investigation today, the ATMs have now been refilled and the situation has calmed down, they say. ATMs from other Swedish banks in Latvia were also emptied over the weekend. In neighboring Estonia, where Swedbank also has a leading role in the market, everything remained calm.
The fact that rumors of bank failures can have such an impact in Latvia has something to do with the country’s recent history. Banks went bankrupt in the 1990s and most recently in 2008, and the country was close to national bankruptcy.
Great distrust among customers
Just two weeks ago, a smaller credit institute, Krajbanka, was closed, a subsidiary of the Lithuanian Snoras Bank, which was emergency nationalized for alleged criminal transactions. Older people in particular then switched to Swedbank.
The people in Latvia are correspondingly nervous, according to Swedbank spokesman Thomas Backteman: "It is clear that the mistrust is particularly pronounced here, actually against all institutions. That is why it was so important for Swedish and Latvian authorities that we heard these rumors yesterday on Latvian television so clearly rejected. "