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Finance elite among privileged circle at closed Riksbank events
SWEDEN'S central bank often refers to itself as one of the world's most transparent monetary institutions. But a closer look reveals it holds plenty of private talks with members of the financial community.
Just two days after Sweden's Sept 9 election, Riksbank Governor Stefan Ingves is due to meet investors and bankers behind closed doors in London to share his views on the economy. He'll hold talks at the Official Monetary and Financial Institutions Forum, a think tank, and is going to Goldman Sachs Group Inc for an event billed as private by the US investment bank. After queries by Bloomberg News, the Riksbank says it was always planned as an open event.
Records of meetings since early 2017 obtained by Bloomberg show that 44 per cent of the external events held by the Riksbank's policy makers were closed-door events.
The list of those allowed to attend is a who's who of finance and business. Among the insiders are the Wallenberg family's Investor AB, all the biggest Nordic banks and global banking giants such as JPMorgan Chase & Co and UBS Group AG. The Riksbank also met privately with Ericsson AB, unions and a long list of business and trade groups, think tanks, universities and other central banks.
The biggest insider was Nordea Bank AB. For example, the largest Nordic bank was visited by Riksbank board members three times in the space of less than a month last year. SEB AB, the main trader of Sweden's krona, has been a frequent host of Riksbank events, including an "informal breakfast" with Mr Ingves on Nov 29, 2017. That was the same day as data on Swedish gross domestic product was released, a key report for the markets.
The practice of closed-door meetings has sparked controversy before and is scrutinised at institutions such as the European Central Bank and the US Federal Reserve. Officials at the major central banks partake in closed meetings, but their policy is generally to publish a text of what was said.
The ECB was criticised in 2015 after Executive Board member Benoit Coeure made market-sensitive remarks to a private audience before the text of his speech was released. Canada's central bank conducted a review in 2016 of its private speaking engagements amid concerns over trust.
Private meetings also run very close to conflicting with the Riksbank's official policy, which states that it's "important that the members don't provide exclusive information at closed commercial or party-political events."
Ann-Leena Mikiver, the Riksbank's head of communication, said it's important that policy makers are able to have meetings of a "more educational nature" in which they are able to listen to, and get feedback from, target groups. She pointed to recent events at Yale University and the Swedish Confederation of Enterprise as examples.
"It's also important to remember that the executive board follows the communication policy even at closed meetings, which means they don't give forward-looking comments about, for example, statistics such as GDP data," she said in an email to Bloomberg. "This means we don't see having closed meetings as a problem." There's also nothing to indicate that the closed-door speeches over the past two years have caused any significant moves in the market.
The bank's main overseer, Susanne Eberstein, the chair of the General Council, says she's confident that the executive board avoids missteps while giving private talks.
"It's of course natural and goes without saying that the governors participate in meetings where journalists aren't attending," she said in an emailed response to questions. "The Riksbank's communication policy applies no matter whether there are journalists attending or not." The bank is the "most transparent in the world", she said.
As part of that transparency, the bank releases detailed minutes of rate decisions, issues forecasts on interest rates, key economic data and frequently meets with the public and media. But it rarely publishes the text of speeches, since policy makers typically only make informal presentations while out in public.
Fredrik Olovsson, the chairman of parliament's Finance Committee, says he had always assumed that the Riksbank was publishing its speeches, "also in these cases". It's "very important that everything that's communicated includes everybody and is through the right channels."
Still, Mr Olovsson says it's his impression that the Riksbank is "very open" compared to other central banks. "I've been to several gatherings and discussions where Ingves has answered questions without media being present," he said. "It has always been very clear and in line with the Riksbank's communication." But he does concede that it's hard to follow up on what was said at a closed meeting.
Ulla Andersson, a key lawmaker for the Left Party, was less forgiving.
"It's less than appropriate for the Riksbank's executive board members to attend closed meetings with commercial actors," she said. "When the Riksbank participates, it should be open or the speeches should be published. It's a reasonable requirement. The question of trust is important."
Analysts and economists who have met behind closed doors with the Riksbank also say that nothing exclusive is being disclosed. But they acknowledged that there's value in the meetings and most were reluctant to comment on the practice.
"We in the financial markets appreciate these sorts of meetings," said Annika Winsth, Nordea's chief economist. "Partly because we can ask questions and understand whatever isn't clear, and partly to give our thoughts. We're assuming that whatever the policy makers say is public information." Klas Eklund, the former chief economist at SEB AB and now an economist at law firm Mannheimer Swartling, said he's not concerned that Mr Ingves - who's been governor since 2006 - will veer of message at any of the meetings.
"Ingves has been in this game for decades," he said. "He, if anyone, knows the rules and how the head of a central bank should behave." BLOOMBERG