March 10, 2020 / 10:00 AM / 3 months ago

Swedish's Breman: lending through banks better option than corporate bond buying

STOCKHOLM, March 10 (Reuters) - Sweden’s central bank would prefer lending to companies through the banking system rather than buying corporate bonds should the economic turmoil due to the coronavirus epidemic require it, Deputy Central Bank Governor Anna Breman said on Tuesday.

“If the situation continues as today, then one has to ensure viable companies have the possibility to survive if they face temporary liquidity problems in this environment with production stoppages or temporarily weaker demand for some sectors,” Breman told reporters on the sideline of a presentation.

“If so, it is an option to provide loans to companies via the banks, and we see that as more appropriate than buying corporate bonds where we would only reach the bigger companies which in reality aren’t having any greater problems as we see it today.” (Reporting by Anna Ringstrom and Niklas Pollard; editing by Johannes Hellstrom)

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