Ministers' Stock Trades Present Unnecessary Risks

The recent stock trading activities of Swedish ministers have raised concerns regarding potential conflicts of interest. Specifically, Labor Minister Mats Persson and Foreign Minister Maria Malmer Stenergard have come under scrutiny for their trading decisions. Persson acquired shares in Ericsson on the same day that the government announced a significant funding boost for research and innovation, in which Ericsson played a key role. Meanwhile, Malmer Stenergard purchased shares in defense contractor Mildef shortly before the government authorized the Swedish Armed Forces to procure combat vehicles, with Mildef serving as a subcontractor.

While neither minister has violated any legal regulations, the optics of their trades are troubling. Legal experts, including Olle Lundin, a professor of administrative law at Uppsala University, suggest that ministers should generally refrain from trading stocks. Lundin argues that while it is understandable for ministers to hold stock at the time of their appointment, they should avoid making trades during their tenure.

It is reasonable to expect that ministers maintain a distance from markets they could potentially influence. This expectation is underscored by guidelines from the Government Offices of Sweden, which state that ministers should not participate in decisions related to companies in which they have financial interests.

The actions of Mats Persson, buying shares in a company he was simultaneously supporting with government funding, highlight either a lack of judgment or a concerning disregard for fundamental principles of impartiality. The same can be said for Malmer Stenergard, whose investment in Mildef coincided with important decisions regarding defense procurement.

The issue is not with ministers saving or investing; rather, it is crucial that their financial activities do not negatively impact their official duties. There are various solutions to mitigate these risks. One extreme option would be for ministers to divest all their investments. For instance, several ministers, including Carl-Oskar Bohlin (Minister for Civil Defense), Pål Jonson (Minister of Defense), and Romina Pourmokhtari (Minister for Climate), have reported no stock or fund holdings.

A less drastic approach could involve having an independent party manage their investments during their time in office. While there is an argument that ministers would still have awareness of their holdings, this could help reduce conflicts of interest. Alternatively, ministers could opt to invest solely in mutual funds. This strategy has proven effective for many politicians, including Prime Minister Ulf Kristersson, who has invested in SEB's Sweden Fund.

Although some may perceive these restrictions as limiting, it is essential to recognize that with a monthly ministerial salary of approximately 150,000 SEK, refraining from trading on the stock market during their term is not a significant sacrifice. Ultimately, such measures serve as a safeguard to protect public trust.

Transferring investment management to a third party or prioritizing mutual funds is not a foolproof solution, but it represents a practical compromise. The focus should remain on ensuring that citizens can trust their elected officials, rather than on the ministers' rights to engage in stock market speculation.