Sweden: Safeguards Against Banks' Exposure to the Baltics

The Swedish government announced Oct. 20 that it plans to guarantee more than 1.5 trillion Swedish crowns (US$205 billion) of borrowing by banks and financial firms until April 2009. The government also intends to set up a stabilization fund for banks to draw from in solvency crises. While Sweden's economy is one of the most competitive in Europe, its banks' exposure to the Baltic states led the Swedish government to set up financial safeguards.