Swedbank signs up to crisis fund

Swedbank signs up to crisis fund
Swedish bank Swedbank has said it plans to sign up to the loan guarantee programme contained within the government's financial stability package.

The bank said in a statement that it intended to submit an application to the government.

Swedbank said it would stand by its decision regardless of whether the country’s other major banks elected to take part in the programme.

“It’s difficult for us to speak for the other banks. But it is our understanding that the programme will be most effective if all banks are on board,” said spokeswoman Anna Sundblad.

The National Debt Office (Riksgälden) is charged with managing Sweden’s banking crisis fund. Swedbank’s application will be sent to the debt office for approval as part of the framework agreement for state loan guarantees.

Swedbank has not yet specified the exact period for which it will be requesting state loans.

“It’s necessary to sign an agreement regarding the duration of each loan,” said Sundblad.

Under the terms of Riksgälden’s agreement, Swedbank will be obliged to pay a higher risk premium than the other major banks.

Swedbank’s risk premium has been calculated at 0.33 percentage points on top of the basic fee of 0.50 percentage points.

This can be compared with a risk premium of 0.25 percent for Handelsbanken.