Sweden doubles savings guarantee

Sweden doubles savings guarantee
Sweden's government has announced a doubling of the state’s bank deposit guarantee from 250,000 kronor ($35,000) to 500,000 kronor, effective immediately.

The new measure, which is designed to further shield savers’ funds and bolster confidence in the financial system, also covers both fixed and variable rate accounts, whereas the previous guarantee excluded certain fixed interest rate accounts.

“The move aims to ensure that savers continue to have confidence in the financial system,” Finance Minister Anders Borg and Financial Markets Minister Mats Odell said in a statement.

“The government is the ultimate guarantor for financial stability. It is responsible for ensuring that there is a set of rules that make the financial system function effectively, is stable and protects savers,” the statement said.

“Increased savings guarantees in a number of other European countries means that savers risk moving to banks in those countries,” it added.

The Swedish state introduced a bank savings guarantee of 250,000 kronor in

1996 following a widespread bank crisis in the Scandinavian country in the

early 1990s.

The guarantee amount was doubled as of Monday and would, unlike the previous guarantee, be valid for all accounts, the government said.

“The government also has the possibility to extend the guarantee to credit institutes and branches in Sweden where the home country’s bank savings guarantee can not be fully honoured,” it said.

“We’re prepared to implement further measures if it proves necessary,” said Borg at a press conference announcing the new guarantee.