Sweden unveils stability plan (Lead)

October 20th, 2008 - 4:41 pm ICT by IANS  

Stockholm, Oct 20 (DPA) The Swedish government Monday unveiled details in a stability plan including to establish a fund to help banks that run into problems in future.The programme was aimed at “restoring confidence” in the financial system, Finance Minister Anders Borg said at joint news conference with Financial Markets Minister Mats Odell.

The fund was to run along the lines recently approved by Eurozone countries, and Odell said the fast-track legislation could likely be passed early next week.

Borg said the plan would be presented to the European Commission to ensure it complied with European Union competition rules.

The plan included safe-guarding deposits, restoring confidence between the financial institutions, and also that the government was to take over preferential shares if a bank requested funds.

Swedish banks were solid and the plan was “not to weaken competition,” Odell said.

Odell said 1,500 billion kronor ($202 billion) was to be guaranteed for loans due to mature in the coming five-year period, and the stability plan was initially scheduled to run until April 2009.

A 15-billion-kronor fund was also to be created. The Swedish National Debt Office was to manage the fund that was to be financed by the state and banking sector.

Banks or financial insitutions seeking capital from the fund would have to comply with restrictions concerning bonus payments and other benefits to executives.

Sweden, a member of the 27-nation European Union, has not introduced the joint European currency, the euro.

Financial analysts welcomed the package.

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