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Sweden might change euro deposit guarantee

Economy | 2011-12-06



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The state deposit guarantee for Swedish bank accounts is tied to the euro since 1 January 2011. The current euro crisis is now causing increasing worries that this might strike Swedish savers. If the euro falls rapidly this would also mean that the state guarantee of deposits of 100,000 euro would fall accordingly. This in turn might lead to a situation where Swedish savers would withdraw their savings, a so called 'bank run'. This would shake the whole financial system.

The Swedish Finance Inspectorate, the Riksbank and the parliamentary committee of finance warned of the consequences of a euro-based deposit guarantee. Minister of financial markets Peter Norman says however to the business oriented newspaper Dagens Industri that a common deposit guarantee in the whole EU is good. But, Norman adds, just as long as the savers feel confident in the system.

"If we find that this is not working we will bring up the issue in the EU and make new decisions", says Peter Norman to Dagens Industri.

The Swedish government is also prepared to replace the current EU-rules if necessary to protect the Swedish savers. This would be done through proposing to the Riksdag to change the deposit guarantee to Swedish Krona instead. In today's value, this would mean a SEK 900,000 deposit guarantee no matter of the fate of the euro.


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