OSLO (Reuters) – Nordic energy firms pledged on Friday to help replenish a contingency fund after a private Norwegian trader defaulted and exchange operator Nasdaq said it would provide additional capital to maintain trust in the market.
Finnish energy company Fortum sign is seen at their headquarters in Espoo, Finland July 17, 2018. REUTERS/Ints Kalnins
Finland’s Fortum will contribute some 20 million euros ($23 million), while Norway’s Statkraft [STATKF.UL] will pay 5 million euros, the two firms said, part of the 107 million euros that members must provide to remain in the market.
Nasdaq Clearing will separately deposit capital of 200 million Swedish crowns ($22 million), as an additional safeguard for an interim period of 90 days, the exchange operator said.
“We want to show our commitment to the market. To increase our own skin in the game. To reinforce the market’s confidence in this situation,” Nasdaq Clearing Chief Executive Officer Julia Haglind told Reuters.
“Nasdaq data analysis concluded that the market movement was 17 times larger than the normal observed daily spread changes, which was confirmed by two external parties, and could be characterized as a true ‘Black Swan’ event,” the exchange said in a statement.
Clearing houses like the one operated by Nasdaq are vital for the stability of markets, acting as an intermediary in stock, bond or derivatives transactions and ensuring completion if one side goes bust.
Einar Aas, a veteran derivatives trader who made large bets on the power market, left a 114 million euro hole in the fund that Nasdaq and commodities companies who are part of the Nasdaq clearing house are obliged to cover.
“It’s a big position and a big loss that clearly affected the default fund,” Fortum investor relations manager Maans Holmberg told Reuters.
“It’s important to look at processes. It is very