EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 26 March 2009 
at the request of the Swedish Ministry of Finance on a draft ordinance  
amending Ordinance 2008:819 on Gov ernment guarantees to banks etc 
(CON/2009/30) 
 Introduction and legal basis
 
On 23 March 2009 the European Central Bank (ECB) re ceived a request from the Swedish Ministry of 
Finance for an opinion on a draft ordinance am ending Ordinance 2008:819 on Government guarantees to 
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 is intended to amend Ordi nance 2008:819 on Government guarantees to banks and 
others, which was issued by the Swedish Ministry of Finance on 29 October 2008. The ECB was consulted on Ordinance 2008:819 at the draft stage and issued its Opinion CON/2008/62 on 
29 October 2008
2. 
Under the current provisions, the Swedish guarantee scheme expires on 30 April 2009. While the scheme 
and other measures have contributed to the stab ilisation of the financial markets, the Swedish 
Government predicts that markets will not have retu rned to normal functioning by the end of April 2009 
and that further support is therefore required. 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  ECB Opinion CON/2008/62 of 29 October 2008 at the request of  the Swedish Ministry of Finance on a draft ordinance 
on State guarantees for banks etc. 
2 To avoid unnecessary uncertainty fo r affected institutions and the financial markets, the Swedish 
Government therefore proposes the following changes to the existing guarantee scheme: 
(a) Prolonging the period during which guarantees may be provided to 31 December 2009. The 
possibility of extending the scheme was already ment ioned when it was established. The reason for 
extending the scheme is that the Government want s to send a clear signal that the measures will 
stay in place for as long as the disturba nces in the financial markets remain. 
(b) Adjusting the maximum amount of guaranteed in struments per participating institution. As a 
consequence of the extension of the period during which guarantees may be provided, the 
Government proposes to adjust the calculation of the maximum limit on guaranteed instruments per institution. The new limit relates to the sum of an  institution’s debt instruments maturing between 
1 September 2008, and 31 December 2009 (hitherto 30 April 2009). The total limit for the scheme of SEK 1 500 billion of debt instruments remains unchanged. 
(c) Including uncollateralised debt instruments with terms of up to five years in the scheme. The 
Government believes that three y ears’ maturity is too short to sustain longer-term lending. This 
adjustment aims at mitigating the problems iden tified by banks and corporations in obtaining 
funding and credit with longer maturities than one to two years respectively. 
(d) Adjusting the solvency requirements. Under the current guarantee scheme, the capital requirements 
for participating institutions are higher than the lega l requirements. Only institutions with at least 
6 % Tier 1 capital and at least 9 % combined Tier 1 and Tier 2 capital qualify for the scheme. The Swedish government fears that this may have ha d unwanted consequences, by implicitly setting a 
new minimum standard for capital ratio requirements.  It therefore proposes to adjust the solvency 
requirements under the scheme in order to bring them in line with the basic legal requirements. 
 2. General observations 2.1 Extension of the scheme 
Regarding the eight-month extension of the guarantee scheme, the ECB emphasises, in line with the 
Declaration of 12 October 2008 made at the su mmit of the euro area Member States in Paris
3, that 
European Union Member States have to act in a coordinated manner, since harmonisation of the 
expiry of national financial support schemes across the EU is of crucial importance4. 
                                                 
3  ‘Declaration on a concerted European action plan of the euro  area countries’ of 12 October 2008 by the Heads of State of 
the euro area, available on the website of the French Presidency, www.ue2008.fr. 
4  This is also in line with what the ECB has stated in its previous recent opinions, see paragraph 3.1 of ECB Opinion 
CON/2009/24 of 17 March 2009 at the request of the German  Ministry of Finance on a draft law on the further 
stabilisation of the financial market and paragraph 3.2 of  ECB Opinion CON/2009/6 of 26 January 2009 at the request of 
the Danish Ministry of Economic and Bu siness Affairs on a proposal for a Law on State investments in credit institutions 
and a proposal for a Law amending the Law on financial stability. 
3 2.2 Maturity of instruments  
Once the guarantee scheme has been amended by the draft ordinance, the ECB understands that 
bank debt with a maturity of up to five years may be guaranteed. In this respect, the ECB reiterates that such arrangements for the granting of gove rnment guarantees on bank debt should, in their 
practical implementation, aim at: (a) addressing the funding problems of liquidity-constrained 
solvent banks by improving the functioning of the market for bank debt of longer term maturity; 
(b) preserving the level playing-field among financia l institutions and avoiding market distortions; 
and (c) ensuring consistency with the management of liquidity by Sveriges Riksbank. As regards 
the extension of the State guarantee to bank debt of  up to five years’ maturity, the ECB notes that 
this measure appears to be in line with the ECB’s recommendations
5 for the harmonisation and 
coordination of State guarantees across the EU a nd with the Declaration, according to which the 
euro area governments should make available a gove rnment guarantee of new medium term (up to 
five years) bank senior debt issuance. In this c ontext, and given the integration of the financial 
markets within the EU, the ECB re peats that the coverage of such guarantees must be harmonised 
within the EU as regards the maturity of the guarant eed financial instruments in order to maintain a 
level playing-field, which is here of essence.  
2.3 Capital requirements 
The ECB acknowledges that under the current Swed ish guarantee scheme, the capital requirements 
for participating institutions are higher than the legal requirements, something the draft ordinance 
aims to change. In this respect, the ECB draw s attention to the EU Council Conclusions of 
20 January 2009 on bank capital, which state that ‘t he provision of capital to the banking sector is 
not intended to create new, higher statutory capital requirements for the banking sector. Banks’ 
capital requirements should continue to be assess ed on a case-by-case basis, in line with existing 
EU regulation, based on their individual risk-pro file and rigorous stress-testing. It should be 
recognised that capital provides a buffer both to withstand the challenging economic conditions and 
to maintain lending to creditworthy borrowers’6. 
 
This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 26 March 2009. 
[signed] 
The President of the ECB 
Jean-Claude TRICHET 
                                                 
5   The reference is to the Recommendations of the Govern ing Council of the European Central Bank on the government 
guarantees for bank debt of 20 November 2008, avai lable on the ECB’s website  at www.ecb.europa.eu. 
6  See the Council conclusions on bank capital, as adopted by the Council (ECOFIN) on 20 January 2009.