New Swedish bank crisis law in two years

New Swedish bank crisis law in two years
Sweden's Minister for Financial Market Mats Odell said on Tuesday that new rules to clarify how and when the Swedish government can take control of a domestic bank in financial trouble should come into effect in 2010.

Prime Minister Fredrik Reinfeldt earlier in the day told reporters he saw no need to speed up the proposal in the light of the current market turmoil.

The proposed legislation was likely to be put forward within a month, Mats Odell told reporters.

Sweden’s central bank governor, Stefan Ingves, has highlighted the need for a stronger regulatory framework in Sweden to manage a crisis in its financial system.

The law has been under discussion for several years.

The proposal has its roots in the Swedish banking crisis of the early 1990s when current Riksbank head Stefan Ingves was forced to negotiate bailouts in the absence of any formal legal framework.

At the time a decision was taken that a set of rules should be developed and a committee on banking law put forward a proposal to the former Social Democratic-controlled government in 2000.

AFX/The Local