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The Potential for Sovereign Wealth Funds to Exert Influence Through Critical Banks in the Five Smallest EU Member States: An Analysis of Malta, Cyprus, Estonia, Latvia and Lithuania

Jan Körnert () and Thomas Junghanns ()
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Jan Körnert: University of Greifswald, Faculty of Law and Economics, Friedrich-Loeffler-Straße 70, 17489 Greifswald
Thomas Junghanns: University of Greifswald, Faculty of Law and Economics, Friedrich-Loeffler-Straße 70, 17489 Greifswald

Credit and Capital Markets, 2020, vol. 53, issue 2, 187-220

Abstract: The financial clout of global sovereign wealth funds (SWFs) is massive, and many of these are controlled by authoritarian regimes. It cannot be ruled out that these funds might take shareholding positions in banks which play key roles in other countries. This paper studies the extent to which SWFs have the potential ability to use shareholdings in critical banks as mechanisms to exert influence on other countries’ banking systems, taking a comparative approach in considering the five smallest EU member states: Malta, Cyprus, Estonia, Latvia and Lithuania. The study concludes that SWFs would, in many cases, need to dedicate only a tiny portion of their assets in order to gain significant potential for influence within these countries.

Keywords: Sovereign wealth funds; critical infrastructure; banking systems; significant banks; critical banks; Mediterranean; Baltics; Swedbank; SEB; Luminor; Bank of Cyprus; Bank of Valletta (search for similar items in EconPapers)
JEL-codes: G21 G15 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:kuk:journl:v:53:y:2020:i:2:p:187-220

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