Opinion of the European Central Bank of 25 June 2010 on extending government guarantees to banks and other institutions and the prolongation of the State recapitalisation scheme (CON/2010/50)
Date: 2010-06-25
Institutions: European Central Bank
Subjects: State aid, Sweden, financial stability, guarantee, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 25 June 2010 

on extending government guarantees to banks and other institutions and the prolongation of the 

State recapitalisation scheme 

(CON/2010/50) 

Introduction and legal basis 

On  20 May  2010,  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 on government guarantees’) and a draft ordinance (hereinafter 

the ‘draft ordinance on capital contributions’) amending Ordinance SFS 2009:46 on capital contributions 

to solvent banks and others. 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 

Functioning of the European Union and 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.  

Background 

1.1   Ordinance 2008:819 on government guarantees to banks etc. 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.  Subsequently  the  ECB  adopted  the 

following  opinions  on  proposed  amendments  to  Ordinance  2008:819:  Opinions  CON/2009/30, 

CON/2009/79 and CON/2010/29. 

The Swedish Government now proposes some changes Ordinance 2008:819 and a prolongation of 

its validity by six months, i.e. that guarantees may be issued until 31 December 2010. 

1  
2  

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

 
 
 
 
                                                 
1.2   Ordinance SFS 2009:46 on capital contributions to solvent banks and others entered into force on 

17 February  2009.  The  ECB  adopted  the  following  opinions  on  proposed  amendments  to 

Ordinance SFS 2009:46: Opinions CON/2009/58 and CON/2010/11. 

The  Swedish  Government  now  proposes  prolonging  the  validity of  Ordinance  SFS  2009:46  until 

17 February 2011. 

1.3   On  27 May  2010  the  Swedish  Government  enacted  an  amended  draft  ordinance  on  government 

guarantees,  compared  to  the  version  submitted  to  the  ECB,  and  the  draft  ordinance  on  capital 

contributions. 

1.4   On 1 June 2010, the ECB received an updated request for an opinion by the Swedish Ministry of 

Finance, containing a revised wording of the draft ordinance on government guarantees. 

2. 

The appropriate time to consult the ECB 

2.1  The  ECB  points  out  that,  in  cases  of  particular  urgency  which  do  not  allow  for  a  normal 

consultation period, the consulting authority may indicate the urgency in the consultation request 

and  ask  for  a  shorter  deadline  for  the  ECB’s  opinion  to  be  adopted.  This  does  not  prejudice  the 

consulting  authority’s  duty  under  Article  127(4)  and  282(5)  of  the  Treaty  to  consult  the  ECB  on 

national  draft  legislative  provisions  falling  within  its  fields  of  competence  in  due  course  of  the 

national legislation process. The second sentence of Article 4 of Decision 98/415/EC provides that 

the ECB must be consulted ‘at an appropriate stage’ in the legislative process. This implies that the 

consultation should take place at a point in the legislative process which affords the ECB sufficient 

time  to  examine  the  draft  legislative  provisions  and  to  adopt  its  opinion  in  all  required  language 

versions,  and  which  also  enables  the  relevant  national  authorities  to  take  the  ECB’s  opinion  into 

consideration  before  the  provisions  are  adopted.  Article  3(4)  of  Decision  98/415/EC  also  obliges 

Member States to suspend the adoption process for draft legislative provisions, pending receipt of 

the  ECB’s  opinion.  In  this  case  the  consulting  authority  did  not  indicate  the  urgency  in  the 

consultation request and did not ask the ECB to adopt its opinion within a shorter deadline. 

2.2  The  ECB  would  appreciate  the  Ministry  of  Finance  giving  due  consideration  to  honouring  their 

obligation to consult the ECB in the future, in accordance with Decision 98/415/EC. 

3.  

Purpose of the draft ordinances 

In  the  memorandum  accompanying  the  draft  ordinance,  the  Swedish  Government  states  that  there  is 

currently  no  demand  for  government  guarantees  and  that  Swedish  banks  are  well  capitalised.  The 

Swedish Government views the guarantee programs as a standby insurance policy that can provide banks 

access  to  medium  term  financing  if  conditions  were  to  deteriorate.  The  Government  also  stresses  the 

importance  of  support  measures  to  be  phased  out  gradually  to  facilitate  institutions’  return  to  market 

financing. 

2 

 
 
4.   General observations 

The  draft  ordinance  on  government  guarantees 

introduces  one  new  point 

to  Article 9  of 

Ordinance 2008:819 whereby institutions, at certain thresholds, are obliged to design a plan concerning 

how to return to normal market financing. The draft ordinance on government guarantees also introduces 

a new Article 12 a on how to calculate the fee in accordance with Articles 11 and 12.  

The ECB notes that the Swedish measures are in line with guidance from the European Commission for 

extending guarantee schemes beyond 30 June 2010. 

The ECB reiterates its view3 that coordination of the duration of national financial support schemes across 
the Union is of crucial importance in order to ensure a level playing field4. In addition, the ECB notes the 
need for national support measures to be temporary in nature5. 

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

Done at Frankfurt am Main, 25 June 2010. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

3  
4  
5  

See Opinion CON/2010/29. 
See Opinions CON/2009/24, paragraph 3.1, CON/2009/54, paragraph 2.5.2, and CON/2009/73, paragraph 3.2. 
See  Opinions  CON/2009/24,  paragraph  2.2,  CON/2009/62,  paragraph  3.3,  CON/2009/73,  paragraph  3.2,  and 
CON/2009/92, paragraph 3.6. 

3