TALLINN — Swedbank will pay the 143 million krooni (€9.1 million) difference lost in the decreased value of the bank’s Private Debt Fund to all investors to restore the public’s trust, the Estonian Financial Supervision Authority announced after talks with the bank.

The financial authority began investigations into the bank after it suspected a conflict of interest in the bank’s decisionmaking with the investment of pension funds.

“From our point of view, there was a clear conflict of interest between the pension fund and their own private debt fund. The pension fund had a lot of assets in the the debt fund and it was hard to make a decision without hurting one of the funds,” Malle Aleksius, representative of the Financial Supervision Authority told Baltic Reports.

“Because there were lots of assets in the fund, they were in a situation where it was hard to act in the interests of the pension fund clients,” she said.

When asked by Baltic Reports about the situation and whether the conflict of interest would be resolved, Swedbank did not comment.

The bank will pay back the losses from other profits. The losses to the pension funds would have hurt the private assets of Estonians, had they not been restored, Aleksius said.

She said the bank was able to operate with this conflict of interest because laws in Estonia are too vague.

Though unable the disclose more information, Aleksius confirmed that similar investigations were underway into other banks in Estonia.

An undated press release on the bank’s website written by Jelena Fedotova, a fund manager at Swedbank Investment Funds, sought to clarify why the losses in the third quarter of the year were made.

“Unfortunately, the fund proved to be unsuccessful in the last three months of the previous year and the first quarters of this year as its rate of return decreased. The pivotal changes in the financial markets and the resulting changes in the environment have had an adverse impact on all funds, including pension funds,” the release said.