Sweden's government today presented a 1.5 trillion kronor (€152.2 billion) plan to help its financial sector if it comes under more pressure from the global credit crisis.
'The stability plan gives the government a mandate to manage problems such as liquidity shortages or potential solvency problems in the future, under predictable forms and where taxpayers' interests are protected,' it said in a statement.
The programme will include credit guarantees and a bail-out fund and it will run to April 30, 2009, but can be extended by the state as far as December 31, 2009.
'The government is proposing powerful measures to ease the effects on Swedish households and companies of the financial turbulence,' said Financial Markets Minister Mats Odell.
The government will act as guarantor for new, mid-term borrowing by banks and mortgage firms up in return for a risk-weighted fee.
The plan will also set up a stability fund, into which the government will put €1.5 billion, that would be used to bail out any important financial institution that ran into a solvency problem.
Plan to shore up Finnish banks
The Finnish government has presented a plan worth €54 billion aimed at shoring up the financial sector in case the global credit crisis takes a heavier toll.
The new plan aims 'to secure banks' long-term financing and to support their financial standing,' the finance ministry said in a statement.
Finland, which so far has escaped virtually unscathed from the ongoing financial turmoil, vowed after a euro zone meeting last week to introduce new legislation enabling it to guarantee bank loans and to invest state capital in banks in case the crisis hit it harder.
The finance ministry said today it had estimated the Nordic country could guarantee bank loans for up to €50 billion, while the state's capital investments in banks would not exceed €4 billion.
If needed, banks could receive state aid against a fee, it said, reiterating however that Finnish banks were financially sound.
The planned measures would remain in place until the end of next year, but would be reviewed in April 2009, the ministry said. The government aims to submit its rescue package plan to parliament in the coming weeks.
Iceland to announce rescue plan
Meanwhile Iceland will soon announce a €4.5 billion economic rescue plan sponsored by the International Monetary Fund and several central banks, the Financial Times has reported.
The International Monetary Fund will shell out just under €1 billion, while central banks from the Nordic region and Japan will chip in the rest for the Icelandic relief package, the FT reported, citing people with knowledge of ongoing talks between Reykjavik and the IMF.
