EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 29 October 2008 
at the request of the Swedish Ministry of Finance on a draft ordinance  
on State guarantees for banks etc. 
(CON/2008/62) 
 Introduction and legal basis
 
On 27 October 2008 the European Central Bank (ECB) received a request from the Swedish Ministry of 
Finance for an opinion on a draft ordinance on State guarantees for banks etc. (hereinafter the ‘draft 
ordinance’). 
The ECB’s competence to deliver an  opinion is based on Article 105(4) of the Treaty establishing the 
European Community and on the sixth indent of Article 2(1) of Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Ce ntral Bank by national authorities regarding draft 
legislative provisions
1, as the draft ordinance relates to rules app licable to financial institutions insofar as 
they materially influence the stability of financial institutions and markets. In  accordance with the first 
sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council 
has adopted this opinion. 
 1.  Purpose of the draft ordinance 
The draft ordinance implements the Law on State ai d to credit institutions (hereinafter the ‘Law’)
2. The 
draft ordinance provides for the granting of aid, in the form of State guarantees for debt obligations, to banking companies, savings banks, members’ banks a nd credit market companies, within the framework 
of the Law. It specifies which credit institutions are eligible for receiving the guarantees and the scope of 
the guarantee commitment. It al so sets out the terms and conditi ons under which the National Debt 
Office, which is responsible for taking deci sions on the aid, will carry out its tasks. 
 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  See ECB Opinion CON/2008/59 of 24 October 2008 at the reque st of the Swedish Ministry of Finance on a draft 
proposal on stabilising measures fo r the Swedish financial system. 
2 2. General observations 
2.1 Valuation and scope of the State guarantee 2.1.1 In accordance with the ‘Declaration on a concerte d European action plan of the euro area countries’ 
of 12 October 2008 by the Heads of State of th e euro area (hereinaft er the ‘Declaration’)
3 and as 
endorsed by the European Council on 16 October 2008,  Member States have to act in a coordinated 
manner to avoid significant differences in nati onal implementation that could have a counter-
productive effect, creating distortions in global banking markets. 
2.1.2 According to Sections 2, 4, 6 and 7 of the draft ordinance, the State guarantees are only to be 
provided for bank debt issuance, defined as debt with  a maturity of more than three months but less 
than five years, which thereby excludes interba nk deposits from the scope of the State guarantees. 
The ECB welcomes such arrangements for gr anting government guarantees on bank debt and 
considers that the proposed arrangements in th eir practical implementation should aim at: 
(i) addressing the funding problems of liquidity-constrained solvent banks by improving the functioning of the market for bank debt of long er-term maturity; (ii) preserving the level-playing-
field among financial institutions an d avoiding market distortions; and (iii) ensuring consistency 
with the management of liquidity by Sveriges Riksbank. 
2.1.3 As regards the price to be charged for gran ting a guarantee according to Section 13 of the draft 
ordinance, the ECB notes that the price for the guarantee will be risk-based and determined on the 
basis of the costs of a corresponding guarantee unde r normal market conditions. In this respect, for 
the sake of transparency, a further more precise indication should be given on the method to be used to calculate the ch arges. In the same vein, it is also noted that the draft ordinance should 
provide for potential cases where no market price is available for the risk of some assets. Moreover, 
the ECB would remind the Swedish authorities that it is of crucial importance to ensure harmonisation of the price for such guarantees w ithin the EU where a level-playing-field is 
essential. 
2.2 Involvement of the central bank 
The ECB notes that according to Section 8 of the draft ordinance, Sveriges Riksbank and the 
Financial Supervisory Authorit y will be consulted on matters concerning aid, which includes 
regulations issued by the National Debt Office  under the draft ordinance. The ECB understands 
that this function will be performed without prej udice to Sveriges Riksbank’s independence and in 
compliance with Treaty provisions.  
2.3 Conditions of support 2.3.1 The support in the form of State guarantees provi ded to credit institutions is made subject to a 
number of conditions specified in Sections 10 and 11 of the draft ordinance, which are aimed at 
ensuring that, inter alia , (i) the public authorities have at their disposal appropriate powers to 
                                                 
3  The Declaration is available on the French Presidency’s website at www.ue2008.fr. 
3 supervise and monitor the use of the provided Stat e guarantee, and (ii) the provided State guarantee 
is not used by the supported credit institution to expand its operations as a result of the support it 
received. The ECB considers that such measure s are in accordance with the principles of the 
Declaration, in particular the need to avoid any possible abuse of the provided support at the expense of entities not benefiting from the support arrangements
4.   
2.3.2 The ECB further notes that, under Section 15 of the draft ordinance, institutions applying for a 
State guarantee will provide the National Debt O ffice with information needed to operate the 
support scheme. In this regard, the ECB reiterates that the ge neral principles of secrecy and 
confidentiality of information provided by financia l institutions should be adequately safeguarded. 
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 29 October 2008. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET 
                                                 
4  See paragraph 3.1 of Opinion CON/2008/59.