“The state will explain to the market that these are the conditions under which the state will go in and take over banking operations which are insolvent or risk falling into insolvency,” said Stefan Svanström, a political adviser at Sweden’s finance ministry.
“There is currently not a framework which outlines which authority should give support or when or how it should happen,” Svanström told Reuters.
He said the proposal would be put forward between the budget later this month and Christmas.
Sweden’s central bank governor, Stefan Ingves, had highlighted earlier this year the need for a stronger regulatory framework in Sweden to manage a crisis in its financial system.
The plan also follows action by authorities in the United States and Britain in recent months to prop up ailing financial institutions to prevent wider contagion in markets.