The Swedish banks will get government support at the same time that the Central Bank announced an additional 150 billion Swedish crowns injected into the the banking system. A new law is being prepared in record speed towards implementation of these new measures which came about after the meeting Sunday night of Euro member states.
The Swedish Central Bank will release the money to the banks in two installments, the first on Wednesday and the second on Thursday and it will run for three months. At the same time, the Central Bank also plans to ease credits to companies outside of the financial sector.
The agreement on state support to European banks made by EU heads of state last Sunday will also become a Swedish law. The agreement provides a framework for the rules that will encompass the state support, although each EU member-state will have each own implementing law. "This is very heartening", said Prime Minister Fredrik Reinfeldt. He stressed however, along with Finance Minister Anders Borg, "that the Swedish banks do not need any capital injection. It is simply capital coverage that is needed since they are still earning well."
Another plan by the government is for the state to guarantee depositors' money in the event any bank goes bankrupt by raising the present SEK500 - recently raised from SEK250, to a higher amount. Both Reinfeldt and Borg think that the agreement among the European leaders is a sign of a more determined and unified action than what one could see in United States.#
(Source: Dagens Nyheter, 14 Oct. 2008)
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