29 January 2009

Commission approves modifications to Swedish support schemes for financial institutions

The Commission approved the planned amendments to the Swedish state guarantee scheme for financial institutions. The amendments concern inter alia the cancellation of growth restrictions of participating banks.

The Commission approved the planned amendments to the Swedish state guarantee scheme for financial institutions. The amendments concern inter alia the cancellation of growth restrictions of participating banks.

 

The amendments concern the following basic features:

Ø       For groups of financial institutions, the maximum amount of debt that can be covered by the guarantee will no longer be assessed at the level of the individual institutions but at the level of the group. This will give groups more freedom to allocate their borrowing between their constituent parts.

Ø       The scope of the guarantee is extended to certain mortgage institutions that were previously excluded.

Ø       The requirement of a balance sheet growth limitation to certain thresholds for banks participating in the guarantee scheme will no longer apply.

 

In addition, the Swedish Central Bank will accept debt covered by the guarantee as equivalent to government bonds for the purposes of its rules on collateral for the full maturity of the debt instruments (and not, as previously, only until 30 April 2009).

 

Press release

 

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