Sweden to present banking package details soon: report

Sweden is said to be on the verge of presenting details of a programme through which state capital could be injected into the country's banking sector, a newspaper reported on Tuesday citing undisclosed sources.

The centre-right coalition government has said it is considering various measures under which the country’s banks might receive capital boosts to ensure they can meet the borrowing requirements of Swedish companies and households.

Business daily Dagens Industri also quoted Sweden’s Financial Markets Minister Mats Odell as saying the programme might include measures along the lines of legislation approved by parliament in October last year.

“That includes everything from hybrid capital injections and other forms of capital injections to participating in issue programmes at market terms,” he was quoted as saying.

Odell also said he believed raising capital in the private sector was likely to be the chief means by which the banks might strengthen their balance sheets, pointing to a new share issue unveiled by Swedish bank Swedbank late last year.

The government last year launched a guarantee scheme for bank lending in order to mitigate the strains of the global credit crunch, but so far only Swedbank of Sweden’s four big banks — which also include Nordea, Handelsbanken and SEB — has chosen to join the programme.