Sweden approves $200bn bailout plan

Measure aims to improve liquidity and stability among Swedish banks.

    Mats Odell  told parliament that Swedish banks were relatively stable at the moment [EPA]

    The bill is part of a co-ordinated European bailout effort to calm markets and restore lending between banks and to customers.

    Credit request

    The main points of the nine-point bill were approved without a vote in the 349-seat legislature.

    The left-wing opposition party demanded votes on two points, both of which were approved by most of the politicians present.

    The credit guarantee covers medium-term loans between 90 days and five years. It is set to expire on April 30 but can be extended through the rest of the year.

    Banks and mortgage lenders that want to join the program must pay a fee and agree to certain restrictions on compensation for their top executives.

    Earlier on Wednesday, the Riksbank, Sweden's central bank, said it would help large non-financial companies with corporate funding since the financial crisis has resulted in the country's loan supply drying up.

    The Riksbank said it would provide a new, temporary credit facility so that the country's companies can receive loans more easily. It will also increase the banks' possibilities to provide them with liquidity.

    "We aim to improve the opportunities for companies to borrow funds,'' Stefan Ingves, the governor of Riksbank said in a statement.

    Earlier this week, Carnegie AB, a Swedish financial company, requested a $630m credit line from the Riksbank, while Swedbank, one of the country's largest banks, announced a new share issue to raise more capital.

    SOURCE: Agencies


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