Brussels, 28th April 2009
State aid: Commission
approves amendments to Swedish bank guarantee
The European Commission has approved under EC
Treaty state aid rules a package of amendments to the Swedish state guarantee
scheme for financial institutions, initially approved on 30 October 2008 and 29
January 2009 (see IP/08/1600
The changes concern the prolongation of the scheme's validity until 31 October
2009 and the extension of its scope. The Commission found that the amendments
were in line with its guidance on state aid to banks during the crisis (see IP/08/1495).
In particular, they are well targeted, proportionate and limited in time and
scope. The amended Swedish guarantee scheme is therefore compatible with Article
87.3.b of the EC Treaty, which permits aid to remedy a serious disturbance in
the economy of a Member State.
Competition Commissioner Neelie Kroes said: "The
global financial crisis is not over and there is still a need to build
confidence and keep credit channels open. The Swedish guarantee scheme remains
an appropriate and proportionate form of support and we can therefore approve it
for another six months".
On 16 March 2009, Sweden notified the following modifications to its support
measures for the banking industry:
- Prolongation of the period during which guarantees can be provided by six
months, until 31 October 2009 (instead of 30 April 2009).
- Extension of the material scope of the scheme by including uncollateralised
debt instruments with a term of up to five years, whereas it previously covered
only maturities of up to three years. However, a strict limit is attached to the
amount of guaranteed debt instruments with longer maturity. Accordingly, a
maximum of SEK 500 billion of guaranteed instruments with terms over three years
will be allowed. The total amount of guarantees that can be granted under the
scheme remains unchanged at SEK 1,500 billion.
- Amendment of the eligibility criteria for institutions covered by the
scheme. Participating banks will only need to meet the basic legal capital
requirements (and not the enhanced capital levels that applied previously).
However, as before, only solvent institutions may benefit from the
The purpose of the changes is to improve the short and
medium term lending and help to smooth the banks' transition from reliance on
state guarantees as markets recover. The Commission found that the amendments
are well targeted, proportionate, and limited in time and scope. The Commission
therefore concluded that the scheme remains in line with the conditions laid
down in the Commission Communication on state aid to the financial sector in the
context of the current financial crisis (see IP/08/1495)
and constitutes an appropriate means to restore confidence in the Swedish
financial market and to stimulate inter-bank lending.
The non-confidential version of the decision will be made available under the
case number N 154/2009 in the State Aid
Register on the DG
Competition website once any confidentiality issues have been resolved. New
publications of state aid decisions on the internet and in the Official Journal
are listed in the State Aid