Opinion of the European Central Bank of 7 October 2009 on extending government guarantees to banks and other institutions (CON/2009/79)
Date: 2009-10-07
Institutions: European Central Bank
Subjects: State aid, Sweden, financial institution, financial stability, guarantee, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 7 October 2009 

on extending government guarantees to banks and other institutions 

(CON/2009/79) 

Introduction and legal basis 

On 2 October 2009, the European Central Bank (ECB) received a request from the Swedish Ministry of 

Finance for an opinion on a draft ordinance amending 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  Central  Bank  by  national  authorities  regarding  draft 
legislative provisions1, as the draft ordinance relates to rules applicable 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  Ordinance  2008:819  on  government  guarantees  to  banks  etc. 

which was adopted by the Swedish Ministry of Finance on 29 October 2008. The ECB was consulted on 
Ordinance 2008:819 at the draft stage and adopted its Opinion CON/2008/62 on 29 October 20082.  

In March 2009 the ECB was consulted on proposed amendments to Ordinance 2008:819 and adopted its 

Opinion CON/2009/30. 

Under  the  provisions  currently  in  force,  the  Swedish  guarantee  scheme  expires  on  31 October  2009. 

While the scheme and other measures  have contributed to the stabilisation of the financial markets, the 

Swedish  Government  is  of  the  view  that  markets  have  not  yet  returned  to  normal  functioning  and  that 

further support is required. 

In the memorandum accompanying the draft ordinance, the Swedish Government refers to the financial 

situation  in  the  Baltic  area  and  states  that  so  far  the  situation  has  developed  better  than  expected. 

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2  

OJ L 189, 3.7.1998, p. 42.  
All ECB opinions are available on the ECB’s website at www.ecb.europa.eu. 

 
 
 
 
                                                 
Moreover,  the  banks  have  made  large  capital  reservations  on  their  balance  sheets  for  further  expected 

losses and, to guarantee further smooth financing, the Swedish Government concludes that the guarantee 

scheme should be prolonged for another six months, i.e. until 30 April 2010, on unchanged terms. 

2. 

General observations 

Temporary nature of the scheme 

In line with the Conclusions of the Ecofin Council of 7 October 2008 and the Declaration issued by the 

Heads of State of the euro area on 12 October 2008, the ECB notes that harmonisation of the measures 

implemented at the national level is essential to ensure the integration of the financial markets within the 

European  Union,  and  within  the  euro  area  in  particular.  In  this  regard,  the  ECB  emphasises  that  the 

coordination  regarding  the  duration  of  national  financial  support  schemes  across  the  EU  is  of  crucial 
importance in order to ensure a level playing field3. In addition, the ECB emphasises the need for national 
support measures to be temporary in nature4. While the proposed extension to the scheme is based on the 

current elements of fragility in the national financial sector, it is understood that the temporary nature of 

this State guarantee scheme is essentially maintained and that the involvement of the Swedish State will 

be limited in time. 

This opinion will be published on the ECB’s website.  

Done at Frankfurt am Main, 7 October 2009. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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4 

See  notably  ECB  Opinions  CON/2009/24,  paragraph  3.1,  CON/2009/54,  paragraph  2.5.2  and  CON/2009/73, 
paragraph 3.2. 
See notably ECB Opinions CON/2009/24, paragraph 2.2, CON/2009/62, paragraph 3.3 and CON/2009/73, paragraph 3.2. 

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