Sept. 14, 2007 (LPAC)--The Swedish Office of State Debt issued new government bonds, and directed the proceeds of the sale straight into private banks as a cash liquidity injection--all in the name of avoiding "panic in the markets". These interventions for stabilizing the interest rate are supposed to be done by the Central Bank but to everyone's surprise the office of State Debt has done it.

The head of the office, Bo Lundgren, revealed on Sept 5 that their office have done this massive interventions on the bond market since middle of July. They have issued 50 billion Swedish Crowns (5 billion euros) of bonds every night since that time. This was confirmed in a televised statement Sept. 12 by the official responsible for bond issues, Thomas Olofsson.

"If these interventions had not been done, there would have been panic in the market", Olofsson stated. The demand for Swedish state bonds has been so great that the market would have disappeared but for these interventions, and the interest rate would have plunged. As there have not been enough bonds available, the State Debt office have issued bonds on the account of the [private] banks."