wfn.org | Church of Sweden Finance Chief is Optimistic about the Future

["Frank Imhoff" <franki@elca.org>]

In Spite of Stock Market Losses, Church of Sweden Finance Chief is
Optimistic about the Future
Emphasis on Long-term Perspective

UPPSALA, Sweden/GENEVA, 8 September 2002 (LWI) - Although the
Church of Sweden has lost SEK 230 million (EUR 25 million) at the
stock exchange so far this year, its head of finance, Bjvrn
Falkeblad, is optimistic about the future.

"Our stock holdings are long-term investments. During my nine
years in the church, the stock exchange has gone up 349 percent.
Our portfolio has increased to 695 percent - almost double," he
says, pointing out that it is particularly good when such profit
is used for the mission of the church.

With its SEK 10 billion (EUR 1.1 billion) turnover and 25,000
employees, the Church of Sweden is the tenth biggest employer and
a major actor in Sweden's economy. Out of the church's estimated
SEK 30-billion (EUR 3.3 billion) capital, SEK 8 billion (EUR 0.9
billion) is placed in shares and bonds, and therefore suffered a
sharp decline during the recent stock market crash.

But Falkeblad considers the decline in stocks as natural, since
the church, like the rest of society, is influenced by the stock
market. Also, he does not blame the drop on decision makers. "The
rules we follow stipulate that the normal portfolio should account
for a combination of 70 percent shares and 30 percent bonds - half
Swedish and half foreign."

Falkeblad considers shares as the best investment from a long-term
perspective. In a 100-year period, the share value has risen by an
annual profit of 8.2 percent in real terms, which surpasses both
bank interest rates and bonds. He explains that capital investment
only makes up for a small fraction of the church's income - 90
percent of the activities are financed by church membership fees.
The 7.5 million Church of Sweden members pay an average of about
SEK 3,000 (EUR 326) per person per year, amounting to SEK 10
billion. "It is the number of members that is crucial for the
church's economy. There are still people who value membership in
the church," according to the finance chief.

But Falkeblad admits that the church has taken some precautions
since the recent crash of the stock market - currently the
church's securities include 55 percent shares and 45 percent
bonds.

But he does not believe that anybody could have predicted the
market crash. He traces it to the September 11 terrorist attacks
on the World Trade Center in New York, and its aftermath. Then
followed the loss of confidence in the United States audit firms
as a result of the ENRON financial scandal. For Falkeblad, these
were significant unforeseen events.

The church's finance team is focusing on the present and future
situation. They predict economic fluctuations and changes, and
plan to invest in the forest and manufacturing industry.

Major structural changes are expected within the church in the
coming years. The finance department has already created an
advisory group that would support both parishes and dioceses in
ensuring sound capital management.

Falkeblad sees possibilities for coordination. He proposes the
grouping of the investments of the country's 2,200 parishes and 13
dioceses as a way of attracting better interest rates.

In spite of the stock market crash and the general uncertainty of
financial markets, Falkeblad underscores long term perspectives.
He notes that thinking into the future is essential when one is
leading a big organization such as the Church of Sweden, because
continuity is very important. He says they are striving to
guarantee he church's long-term survival.

(The LWF is a global communion of Christian churches in the
Lutheran tradition. Founded in 1947 in Lund (Sweden), the LWF now
has 133 member churches in 73 countries representing over 61.7
million of the 65.4 million Lutherans worldwide. The LWF acts on
behalf of its member churches in areas of common interest suh as
ecumenical relations, theology, humanitarian assistance, human
rights, communication, and the various aspects of mission and
development work. Its secretariat is located in Geneva,
Switzerland.)

[Lutheran World Information (LWI) is the information service of
the Lutheran World Federation (LWF). Unless specifically noted,
material presented does not represent positions or opinions of the
LWF or of its various units. Where the dateline of an article
contains the notation (LWI), the material may be freely reproduced
with acknowledgment.]

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