“Even though the financial markets today are functioning better (than in October), the global financial crisis and its impact on jobs and companies in Sweden is far from over,” Financial Markets Minister Mats Odell said in a statement.
Odell also announced on Thursday that the Swedish government intends to try to put a stop to the payment of large bonuses to senior executives in the Nordic bank Nordea.
The government managed to put a stop to proposed bonus payments in the telecom operator Telia Sonera on Wednesday- against the will of the board. But Odell is less confident of success with Nordea as the Swedish state holds only 19.9 percent of the company shares and voting rights.
The Nordea board is set to present a new long-term bonus program at its shareholders’ general meeting on Thursday.
Sweden at the end of October presented its vast bank guarantee programme aimed at helping banks and financial institutions with liquidity problems secure needed loans.
The plan was originally set to expire on April 30th, but Odell said on Thursday that the deadline would now be extended through October 31st this year with the possibility of further extension if deemed necessary.
“The government considers that there is still reason to have powerful measures in place to ensure that banks and other credit institutes can provide households and companies with loans at reasonable conditions,” he said.
Only one Swedish bank, Swedbank, has taken advantage of the programme so far, while some of the country’s other large banks have criticised the stringent conditions attached to the loans, including a hefty fee and restrictions on management bonuses, raises and golden handshakes.
Most of the dissent reportedly centres around the government’s suggestion to write off half of the guarantee programme fee from the amount paid to participate in a separate and obligatory “stability fund,” which was also launched last October.
That fund, which is expected to grow from an initial 15 billion kronor to 150 billion over the next 15 years, is aimed to help banks in case of potential solvency problems in the future.
The government wants the amount each bank pays to participate in the stability fund to be calculated purely on their lending in Sweden, something banks like Handelsbanken have complained benefits bigger risk-takers like Swedbank that have lent massively abroad, especially in the Baltic states.
“This will make it cheaper to lend money to foreign companies than to Swedish companies,” deputy Handelsbanken chief Björn Börjesson told financial daily Dagens Industri.