Press release 06 October 2008
Ministry of Finance

The Government widens the deposit guarantee

The Government has today decided to widen the deposit guarantee to protect Swedish depositors.

- The aim of the measure is to maintain the trust depositors have in the financial system, say Finance Minister Anders Borg and Financial Markets Minister Mats Odell.

The Government is the final guarantor of financial stability. It should ensure that the necessary regulatory framework is in place to make the financial system effective and stable and protect depositors. Higher levels of deposit guarantees in a number of European countries risk making depositors move to banks domiciled in these countries. This risk is especially pronounced in a situation of great uncertainty and anxiety.

In 1996 the Swedish Government introduced a guarantee of SEK 250 000 for transaction accounts. Under the proposal to widen the deposit guarantee, the amount is being raised to SEK500 000 and the guarantee covers all types of deposits regardless of whether the savings are free to withdraw or not. The Government has the possibility of widening the guarantee to credit institutions with branches in Sweden in cases where the home countrys deposit guarantee is not honoured in full.

The widened deposit guarantee is effective immediately.

The situation is difficult to assess. The Government stands ready to take further action if developments warrant additional measures.